Is a weaker currency good for the economy?

Two related stories, revealing the similar regulatory mentalities of British and American monetary authorities, recently appeared on the BBC World News website. It was reported on October 9th that "the US trade deficit shrank unexpectedly in August as the weak dollar boosted exports." See: http://news.bbc.co.uk/2/hi/business/8299682.stm. The article goes on to quote Keith Hembre at FAF Advisors: "I would interpret a flattening out of the trade deficit showing a broader stability in the economy."

A separate story published October 13th reports on the anxiety in Britain over the prospect of continuing price deflation: "The inflation data showed that the Bank of England pumping of about £160bn into the the economy's money supply - so-called quantitative easing - had not yet taken effect, said James Hughes, chief economist at Black Swan Capital Wealth." See:http://news.bbc.co.uk/2/hi/business/8304028.stm

Bizarrely, central bank authorities seem convinced that debasement of one's national currency to so called "competitive" exchange rates is a recipe for economic growth and "broad stability." Lower prices benefit consumers during an economic recession and individual purchasing power would be lifted in a non-inflationary environment. Manipulating exchange rates downward in order to boost exports hasn't produced anything resembling macroeconomic "stability" in Japan and debasement of the dollar will only serve to make U.S. debt less attractive, force up interest rates on that debt and make the U.S. itself an increasingly dubious place to invest.