Blankfein—who appeared on CNBC's "Squawk Box" in an interview from the World Economic Forum in Davos, Switzerland—did caution that emerging market currencies are high yield but also high risk.
"If somebody said, 'Take a position on the emerging markets and you can't change your mind for fill-in-the-blank—one year, five years—I'd be long, not short. It doesn't mean I'm going to feel good about it," he said.
(Read more: It's getting ugly in emerging market currencies)
The emerging market currency risk has become a macro event, he added. "All of these countries that are far apart on the globe are very close in investors' minds."
Blankfein stressed that over the longer term, there are opportunities in emerging markets. "You see growth, education, mobility in these countries. Basically, the flattening of the world has given tremendous opportunities in these countries."
For example, the Goldman chief said Mexico feels like a different and energized place now—and together with the U.S. and Canada, there's a big opportunity in North American energy production.
As for the U.S. economy, Blankfein said he's still optimistic about the economic prospects for U.S. "There's a big tailwind ... the deleveraging that's occurred, the interest rate environment, the housing situation, the energy—all of it favors the United States."
But growth here won't exceed the high side of expectations because the bar has been risen. "Expectations are in line with reality."
The recent U.S. stock market drop should be viewed relative to the high levels that stocks are still trading, he said. With Thursday's triple-digit drop in the Dow Jones Industrial Average, the blue-chip index is only about 2.4 percent off its all-time highs.
While Goldman analysts have predicted the high probability of a stock market correction in 2014, Blankfein said, "We could pull back a lot more and it won't necessarily derail the track that we're on."
Explaining the recent market moves, he added that market sentiment shifts happen when investors think they're no longer playing with "house money" and they're using their own.
Meanwhile, Blankfein said that China doesn't really have a mechanism for writing off mistakes, and it needs to do more to develop its capital market. "It's a 'chicken-and-egg.' how do you build up those ... [when] you don't have the companies that are public? How do you have institutional investors? And without institutional investors how do you take the companies public? Who buys them? They have to do all of this stuff at once. It's very difficult."
(Read more: Lloyd Blankfein: 'This could be China's century')
As for Europe, Blankfein said the economy is doing much better than two years ago, but it's still a half a cycle behind the U.S.
On the issue of banks paying out big fines to the government, he argued that mistakes are not necessarily crimes.