G7 finance ministers are meeting in Washington this weekend to discuss the sub-prime credit mess and ways to coordinate measures aimed at backstopping the world financial system against various credit strains and systemic risks. All that is well and good. But are any of these financial bigwigs paying attention to the rise in global inflation?

Yesterday’s Wall Street Journal highlighted this story on its front page. Former Fed chief Paul Volcker expressed worry about rising prices earlier this week. Mr. Volcker — probably the hardest-money American central banker in the 20th century — strongly (and rightfully) criticized the chronic weakness in the U.S. dollar.

Today, the latest print on import prices from March added further fuel to the fire. It revealed an eye-popping 2.8 percent monthly jump, and a knee-knocking 14.8 percent bulge over the past 12 months. Yikes is that bad news. It’s one of the reasons why consumer purchasing power is declining and corporate profits are falling. Even when you exclude fuels the yearly change is still 5 percent — a harbinger of higher consumer prices at home.

A story in today’s Wall Street Journal notes that China has appreciated its yuan currency by roughly 20 percent, in order fight off rising inflation pressures.

Across the pond, Jean-Claude Trichet and the Europeans have appreciated the euro to hold down the global inflation surge and its impact.

So I’m wondering whether Treasury man Hank Paulson and Fed head Ben Bernanke are thinking about, or talking about, the U.S. inflation story at this G7 meeting. I’m wondering whether they are considering ways and means to appreciate the U.S. peso, and perhaps even begin to turn it back into the U.S. dollar.

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