Despite numerous naysayers, the case can be made that Bernanke's massive monetary easing to pre-empt deflation will be judged as successful as Paul Volcker's drastic 1979 tightening was in combating inflation.
Behind the currency debate lies a somber reality. Most of China's exports are the result of the relocation of production outside of the U.S. -- it is American corporations that fuel the balance of payment deficit.
Letting free markets set the exchange rate is the best policy for both the U.S. and China. But in its absence, a strong dollar is in the best interests of the United States, even if the Chinese fail to grasp this.
There are few areas of economics more boring than accounting identities. This is unfortunate, since it is virtually impossible to have an understanding of economic policy without a solid knowledge of it.
While aggravated by the ECB's structural weakness, the euro's crisis was caused by the inability of the continent's political leaders to agree on policies to help Greece and safeguard their common currency.