This was demonstrated a couple of years ago when then Japanese prime minister Hashimoto Ryutaro stated that Japan wished to sell off its U.S. treasury bonds. The next day Wall Street stocks went down on the news. Experts calculated that if Japan sold its entire T-bond portfolio, the dollar could plummet to a mere 50 yen. What America fears most is a fall in the value of the dollar and its stocks. One of the reasons is that the U.S. government has sidestepped its social security obligations, shifting the pension burden to the private sector.
People assume that such investments are sound, but that's far from the case.
Investing in a mutual fund is no safer than purchasing stock. In terms of capital movement in the world, the money economy, which trades in these vague financial products, is 25 times the size of the other. So international economic trends today are driven not by traditional activities, but by operations that are simple yet not easily grasped by the uninitiated. To condemn such operations as immoral is fruitless. Inasmuch as derivative dealing has appeared as a new economic activity, we have no choice but to come up with ways of competing in this dimension.