Westerners visiting South Korea are often surprised to find locals tucking into kimchi, pickled cabbage, for breakfast. The outcome of the G20 talks in Seoul is likely to be about as appetising for the US as a diet of kimchi. Unlike the spicy delicacy, though, the US will not find it improves with time.

The main issue at the G20 is global imbalances, which provided the backdrop to the financial crisis and continue to distort currency and bond markets. Emerging markets, particularly China, run big current account surpluses with the west, particularly the US. This creates upward pressure on emerging currencies, which is offset, at least by China, through purchases of developed country government bonds.

The negative results are everywhere. Chinese exports are artificially boosted, so Chinese investment is misdirected. The incentive for the US to rein in its free-spending ways is reduced by cheap Chinese financing.