Reply #12: Re: dollar watch and the risks of a weaker dollar

[Maeve]

Opening Pandora's box
NEW YORK (CNN/Money) - When it's all over, Treasury Secretary John Snow may regret what he wished for.

Thanks to prodding from the United States, Snow and other G-7 finance ministers meeting over the weekend delivered a communique that called for "more flexibility in exchange rates" -- a development that the market is interpreting as a blow against China's pegging of the yuan to the dollar and other Asian countries habit of intervening to keep their currencies weak.
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There is much that could go wrong. To begin with, the world desperately needs an economy that is not dependent, as it has been, on the United States for growth. For that to happen, Asian economies need to see more of a recovery than they have so far. Weakening the dollar threatens to plunge Asia back into recession at a time when the U.S. economy simply isn't strong enough to pull the weight that it used to.
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