Talking Numbers

Here's why emerging markets scare me, but here's what terrifies me: Gartman

Emerging markets scare me, but this terrifies me: Gartman

When it rains, it pours. And, when that rain is bad news in bad emerging markets, it can pour even in the United States.

Brazil, Argentina, Turkey, Egypt… the list goes on and on of countries that are seeing their currencies and markets get hit all at once.

While all are in some way affected by major global factors such as China's economic slowing or the US tapering its monetary stimulus, each one is also affected by their own idiosyncratic issues.

Nonetheless, these localized troubles may conflate – and conflagrate – leading to real problems in developed markets, including the United States.

(Read: Emerging-market currency 'contagion' spreads)

"If it were just Turkey, we could deal with it," says Dennis Gartman, editor and publisher of The Gartman Letter. "If it were just Venezuela, we could deal with it. If it were just China, we could deal with it. But, you throw them all in the pot at one time, you've got a problem everywhere… This is very real."

"The real reason that we've gotten the stock markets to tumble as strongly as they have are these problems all coming in one fell swoop at one time. It's quite serious."

Gartman sees emerging markets causing trouble for the rest of the world for at least the next several weeks. But, while most emerging market currencies are dealing with their currencies weakening, one of the world's most developed markets, Japan, is dealing with a sudden rise in the yen.

The US dollar has declined more than two yen since Thursday, when it was trading at 104.64. Three months ago, the dollar was 97.42. Gartman doesn't believe there will be intervention by the Bank of Japan under the direction of the Ministry of Finance.

"I doubt that we'll see any intervention unless things get really, really ugly," says Gartman. "And, right now, they're ugly but they're not really, really ugly – yet."

But, for American investors, there may be a problem a lot closer to home. In fact, it may even be in the home. Extraordinarily cold weather in North America has helped push natural gas above $5 per million British thermal units (BTUs), if not higher. And what it's doing to the market terrifies Gartman.

(Watch: Natural gas price spikes, topping $5 for 1st time since 2010)

"You've got places in the spot market where there's really a tightness of supply that are $40 and $50 and maybe even a multiple of that in some areas," says Gartman, who also notes a short supply of propane. "Between propane and nat gas, people in the United States are going to have a real problem when they look at their heating bills over the next several days… That, too, is weighing upon share prices. That makes everybody feel uneasy. That makes everybody feel uncomfortable."

To see more of Dennis Gartman's take on emerging markets, Japan, and energy, watch the video above.

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