We should never forget the "beggar-my-neighbor" policies of the 1930s. Then, the Hoover Administration adopted a series of protectionist measures which proved of no help to the US economy but were disastrous for other countries. Protectionism damaged the world economy, which in turn dragged the United States into an even deeper crisis.

The modest success of the G20 Summit tells us that nobody wants a currency war. But it also highlighted the fact that, two years on from outbreak of the financial crisis, the G20 has still not fully analyzed the causes of the crisis, nor has it come up with an effective strategy for economic recovery.

Financial regulation is not the crux of the issue. When is the Wall Street not driven by greed? And when has financial regulation ever been effective in the United States? The fundamental issue the United States needs to address is its model of development.

It is a model that inflicts huge damage on the environment as the U.S. scours the rest of the world for raw materials. Other countries have started to follow the American example. But this is not the road to sustainable development and they will pay the price for it.

America also overestimated the so-called virtual economy. In the past two decades, the United States has prioritized finance and real estate and neglected the real economy. The end result has been unemployment and economic crisis and explains why Obama is now targeting the RMB.

The failure to tackle the roots of the crisis led Obama to make crucial mistakes in his bailout program. The resulting waste and failure to boost the real economy handed electoral victory to the Republicans.

Printing dollars now seems to be one of the few options left for the United States. But America could be digging its own tomb. The international community may lose faith in a monetary system based on the dollar if people believe the United States will print dollars whenever it is short of money and offload its own crisis onto others.

Quantitative easing is harming the healthy development of emerging economies. The huge amount of dollars produced by the United States in the past two years has caused a surge in commodity prices, and emerging economies like China, Brazil and India are feeling the pressure. In addition, the influx of hot money will greatly increase inflationary pressures.

To avert asset bubbles and inflation, countries will have to slow their rates of growth. Rising economies have been taking monetary measures against US-exported inflation. This will certainly slow down the global economic recovery as a whole.

The fluctuations in the A-share market are a case in point. Driven by excess liquidity and the influx of international hot money, a one-month rebound soon led to a market correction. All this can be attributed, at least in part, to the Fed's quantitative easing policy.

The author is a columnist with China.org.cn. For more information please visit: http://www.ccgp-fushun.com/opinion/node_7077605.htm.

(The article is translated by Luo Huaiyu.)