Even China and other emerging markets, viewed often as the high-growth alternatives to stagnant markets in the US and Europe, carry risk. The potential of emerging markets is clear: They have growing populations of increasingly educated consumers and workers, and these nations tend to have lower debt loads than the US or European nations.
But leaders in China and other upcoming nations are struggling to hold inflation in check and contain unemployment, while managing the transition from an export-fueled growth to a new era driven more by domestic demand from consumers.
Fans of China's prospects, like Stephen Roach of Morgan Stanley, predict this giant economy can weather the challenges as leaders execute their vaunted five-year plans for development. Some bears say the long boom could turn to bust – or at least run off track for a time.
Food for thought: From late April to mid-September, an exchange traded fund representing Chinese stocks fell about 20 percent in value, more than America's S&P 500 index. Similarly, an emerging-market index is down much more than the S&P during that time.
So the whole world is awash in risk. There's a potential monetary fix, though, if you believe in printing presses ...
