Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Is Decoupling possible in this complex global world economy?

Thai, Malaysian  Growth Slow, Heralding Caution in Rate Moves (via Bloomberg)
http://www.bloomberg.com/news/2010-11-22/malaysian-economy-expands-at-slowest-pace-this-year-as-asian-growth-eases.html
 
  

Whenever I turn on Bloomberg or CNBC, many investors are praising about the enormous growth rates from emerging markets. I can certainly understand that emerging economies will have prominent growth rates going forward, as opposed to the many western countries where the governments are worried about their gigantic liabilities.

 -Gross domestic product in Thailand, Southeast Asia’s largest economy after Indonesia, increased 6.7 percent in the three months through September from a year earlier, after growing 9.2 percent in the second quarter, the government said yesterday. Malaysia’s economy expanded 5.3 percent last quarter, compared with an 8.9 percent rate in the previous three months, its central bank said.

Of course these countries have started at low growth points, but these numbers are certainly good. As a government official, for the sake of public, I would raise the interest rates. However, when GDP numbers are printed lower than public expects, the government official surely will be in line of unemployment check. I do not believe that the government can efficiently neither induce more growth nor restrain inflation. It's more likely they will lead the economy to the unintended consequences. As 1/3 of economies(U.S. and many European countries) are still deep in recession or depression, emerging markets can grow at this fast pace forever unless they develop strong domestic economy. I think it will eventually happen, but it will not happen tomorrow. 


Disclosure: NO POSITION