BEN BERNANKE is in Paris today, giving a speech on imbalances
that's sure to be read as criticism of China. Here's a key
quote:  These issues are hardly new. In the late 1920s and early
1930s, the U.S. dollar and French franc were undervalued, with
the result that both countries experienced current account
surpluses and strong capital inflows. Under the unwritten but
long-standing rules of the gold standard, those two countries
would have been expected to allow the inflows to feed through to
domestic money supplies and prices, leading to real
appreciations of their currencies and, with time, to a narrowing
of their external surpluses. Instead, the two nations sterilized
the effects of these capital inflows on their money supplies, so
that their currencies remained persistently undervalued. Under
the constraints imposed by the gold standard, these policies in
turn increased deflationary pressures and banking-sector strains
in deficit countries such as Germany, which were losing gold and
foreign deposits. Ultim