For a very intelligent political response to Stephen Roach's constant worrying over global capitalism's imbalances, check out "Asia�s Mercantilism Today Is Blowback From 1997" over at The Prudent Bear.
a move away from US-centric growth is absolutely essential if debt-laden American households are to rebuild their balance sheets and the country as a whole begins the process of alleviating extreme external imbalances. But however much we sympathise with the thrust of Wood�s criticism, we believe that Asia�s proclivity to buy dollars virtually on auto-pilot and thereby perpetuate the region�s mounting current account surpluses can readily be understood as blowback to the American response to the region�s grave economic crisis in 1997/98.In short, East Asia knows the dramatic risks of speculative attacks on their currencies and have vowed never the let that happen again. In the current context, the only way to do that is peg to the US dollar and stock up on greenbacks.
Neo-liberal frenzy for global capital mobility is at the heart of this problem. Global rebalancing could use a healthy dose of 'sand in the wheels' if you know what I mean.