Of course its far better, though perhaps less dramatic, that the meetings will deal with the "balance of financial terror" instead of nuclear terror. One element of reducing that terror will be convincing China to relax its de facto Dollar peg (but not too abruptly, please). Simon Johnson suggests an approach to deal with this issue:
Talking in public about big sticks never goes down well in Asia, and the administration should deny any inclination in this direction. But the mainstream consensus is starting to shift toward the idea that the World Trade Organization (W.T.O.), not the I.M.F., should have jurisdiction over exchange rates. The W.T.O. has much more legitimacy, primarily because smaller and poorer countries can bring and win cases against the United States and Western Europe in that forum. It also has agreed upon and proven tools for dealing with violations of acceptable trade practices; tailored trade sanctions are permitted.Hmmm... living in Middletown Connecticut and Oxford Ohio, I'd missed the shift in the "mainstream consensus." Very interesting...
No one wants to take precipitate action in this direction, but extending the W.T.O.’s mandate in the direction of exchange rates would take time — and presumably warrant discussion at the G-20 level. The United States has great influence over the G-20 agenda, and Mr. Obama’s staff members should hint, ever so gently, that this is where they see the process going.
