It may not be as high-profile as human rights or Internet censorship, but one of the most contentious policy issues attending President Obama's trip to China is currency policy. China is buying up U.S. dollars by the boatload while keeping its own currency artificially undervalued, making Chinese goods cheaper and American goods more expensive. Economists warn that the resulting trade imbalance exacerbates slow job growth as America tries to crawl out of a recession. Columnists offered myriad political and economic prescriptions for how to force China to alter its policies. The Wall Street Journal staff editorial saw what was missing from this debate -- what about Asian economies?

Federal Reserve officials sometimes sound as if their only worry is the domestic U.S. economy, but their gusher of dollars is starting to have serious consequences for the rest of the world. Nowhere is this more evident than in Asia, where President Obama is getting an earful from leaders this week about what all those greenbacks are doing to their economies.

Many of these nations peg their currencies, formally or informally, to the greenback. So they are getting a huge dollar liquidity kick from the carry trade, in which people borrow U.S. dollars at exceptionally low U.S. interest rates and invest them for higher returns elsewhere. As a result, Asia's stock markets are outstripping U.S. and European bourses by a country mile. [...]

The risk is more asset bubbles and misallocation of global capital. [...] This is a dangerous game that could lead to some serious economic policy mistakes, not the least of which is the imposition of capital controls as countries try to stem the incoming tide of "hot money." [...] Asset bubbles that build and burst in Asia will eventually cause trouble here, much as they did in the Asian monetary crisis of 1997.

With so many American economists puzzling over what China's monetary policy means for the United States, the Wall Street Journal paused to consider what effect our monetary policy could have on Asian economies.