Our friend John Rutledge is absolutely right: the U.S. weak-dollar policy has been bad for both America and for China, who we've cajoled into constant appreciation of the yuan. This has led to all number of distortions and crises in the U.S. -- see, subprime, inflation, oil over $100 per barrel, whacked-out credit markets, etc. -- and to hot money flows into China, where speculators ride the free-money carry trade of a currency you know will go only up.

It was a mistake for China's government to give in to American pressure and begin gradual revaluation. It was a mistake for the US government to press for the changes. Devaluing your currency in an attempt to stimulate growth is a fool's game.

This Thursday morning I'll participate in a discussion of these issues at a U.S. Chamber of Commerce event on "The Declining Dollar and the Global Economy."