That is great! And I learned a new word.
You state that it is “not clear” how preventing disorder in Japan benefits the United States. As your letter notes, Japan is a major holder of U.S. Treasuries. It is also a critical trading partner and a treaty ally. Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses. For a fuller explanation, I recommend any entry-level course in international finance for you and your staff, or I can give you a tutorial on Foreign Exchange for Dummies.I unraveled this scenario about a week ago; naturally Sen. Eliz Warren wouldn't see it.
The U.S. Treasury bailed out the Japanese economy recently. Questions were asked why we would help Japan when our own books oooze 'concerns.'
Japan owns a sizeable portion of our $40 trillion US debt. If Japan had to sell off a portion of that debt obligation to stabilize their own economy, interest rates would rise on the global bond market. That would result in not only interest rates rising on the sale of U.S. bonds but also higher interest rates to be paid on our existing national debt - a sizeable portion of the federal budget - AND increased stress on family borrowing in the States.
Secretary Bessent calculated that it was cheaper and less disruptive to bail out Japan than for the U.S. to suffer a major adjustment to the global bond market... {His thinking}