The Group of 20 finance ministers emerged from their weekend powwow in South Korea declaring themselves to be united firmly against the “competitive devaluation of currencies.” We’re glad to hear it. At the same time, however, they all but declared that the U.S. dollar should continue to decline in value while China and other countries should revalue. Apparently flooding the world with dollars in the name of reducing the U.S. trade deficit doesn’t qualify as a “competitive” devaluation.

That contradiction wasn’t lost on German Economy Minister Rainer Bruederle, who got to the heart of the matter by questioning the U.S. Federal Reserve policy of further monetary easing. “It’s the wrong way to prevent or solve problems by adding more liquidity,” Mr. Bruederle said, coming the closest of all the assembled worthies to mentioning the dollar devaluation that is at the heart of the world’s currency turmoil. But the German was singing solo.

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Fed head Ben Bernanke and the FOMC dropped a new policy bomb at their meeting this week. Now they say inflation is too low. That’s the real problem. And the solution? Punch up the money supply and punch down the dollar — or what I used to call King Dollar. No more.

In the 24 hours following the Fed announcement, gold rocketed up toward $1,300, a new record high. And the dollar plunged. It’s a big vote against the central bank and its constant tinkering and fine-tuning.

The Fed actually has opened the door even wider for more money-creating, balance-sheet expanding, Treasury-bond-buying actions at its next scheduled meeting, which will come the day after the midterm elections on November 3. That’s when QE2 may sail. “Quantitative easing” is what they call it. I call it dollar whack-a-mole.

Here’s a currency-trader quote from the Wall Street Journal: “Quantitative easing is broadly viewed to be corrosive to a currency’s value.” Right on, brother. Even though Bernanke doesn’t get it, the weaker dollar will rev up inflation mighty fast.

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BEIJING (AP) — Chinese President Hu Jintao rebuffed U.S. calls to re-value China’s currency, telling President Barack Obama that any tinkering with the yuan will be done by Beijing in accord with domestic interests.

Hu defended China’s policy of pegging the yuan to the dollar at a Monday meeting with Obama in Washington and said changes to the exchange rate would not come from U.S. pressure.

“Detailed measures for reform should be considered in the context of the world’s economic situation, its development and changes as well as China’s economic conditions. It won’t be advanced by any foreign pressure,” Hu said in remarks released by China’s Foreign Ministry on Tuesday. He said reform would come based on China’s “own economic and social development needs.”

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