The Financial Times’s Martin Wolf zeroes in on one of the critical economic problems that led to the credit crisis (among other things), but hasn’t been touched since: China’s tampering with its currency, the renminbi.

Wolf presents the case for why China’s exchange-rate policies—keeping it artificially low, “to a degree unmatched in world economic history”— affect everyone.

Basically, China’s currency should be gaining strength as it increases in economic might. It hasn’t, though. Wolf points out that the renminbi is at roughly the same levels as it was in 1998, despite its economy’s explosive growth since then.

That’s because China manipulates its exchange rate to keep its currency weak. A weak currency is good for Chinese exporters and bad for those who want to sell it stuff, like, say, the U.S., with which China has a huge trade surplus and to whose currency it has pegged its own. If it floated its currency, it would soar against the dollar, making it more expensive to buy Chinese products and less expensive for the Chinese to buy ours. That would reduce our trade deficit with them and keep more jobs here.

But the impact goes beyond the basics. That’s because it’s built up huge surpluses, and that money’s got to go somewhere. It buys lots of U.S. debt and that helps keep our interest rates low. Too low, as we found out in the bubble.

Wolf quotes the governor of the Bank of Canada saying “large and unsustainable current account imbalances across major economic areas were integral to the build-up of vulnerabilities in many asset markets. In recent years, the international monetary system failed to promote timely and orderly economic adjustments.”

And Wolf himself warns:

What we are seeing, as Mr Carney points out, is a failure of adjustment to changes in global competitiveness that has unhappy precedents, notably during the 1920s and 1930s, with the rise of the US, and, again, during the 1960s and 1970s, with the rise of Europe and Japan.

Without a change of course, if “China’s current account surplus were to rise towards 10 per cent of GDP once again, the country’s surplus could be $800bn (€543bn, £491bn), in today’s dollars, by 2018. Who might absorb such sums? US households are broken on the wheel of debt, as are those of most of the other countries that ran large current account deficits.”

Wolf raises the specter of depression as a serious possibility for how this stalemate plays out. If China doesn’t float its currency and start spending money, transferring some economic growth to other countries who are crippled with debt, something’s going to give.

What Wolf doesn’t say is how the debtor countries like the U.S. might get China to cooperate. Tariffs spring to this not-a-free-trade-fundamentalist mind, but China has its own trump card in the gigantic amounts of U.S. debt it holds.

It’s unclear how this mess ends well, which means there’s lots of reporting to be done here.

Ryan Chittum , a former Wall Street Journal reporter, is deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.