On a positive note for Japan, export growth in December surprised economists by growing at 12.1%, compared to the 7.6% forecast, for the first time since the collapse of Lehman in 2008. Breaking down the numbers, analysts were equally unsurprised to learn which market was responsible for the rapid growth. If I'm hitting my target audience, you've already guessed it... (hint: it starts with "Chin")

The half Joseph Stalin half Adam Smith economy continues to roar at 10.7% GDP expansion, in the final quarter of 2009, yet the majority of consumer markets have been slow to follow suit. Chinese stimulus can be thanked for the birth of domestic consumerism in China, as households have been given vouchers to buy specific goods, creating demand in centrally targeted industries. Simultaneously, all levels of government opened the faucet of liquidity, through low borrowing costs and lax loan requirements, which has accelerated the churning out of western style real estate for consumers to fill with all their new stuff. The price tag on China's stimulus so far scans just shy of $600 billion USD, representing 13% of GDP in 2008 and well above spending in the U.S. and Korea, closer to 5% of GDP for each.

Hugh Young, managing director of Aberdeen Asset Management Asia, sees Asia leading global growth in 2010. Mr. Young explains that Asia is experiencing increased consumer demand, less reliance on exports as well as lower levels of personal, corporate and government debt compared to developed nations.

I strongly doubt you’d hear many voices disputing the economic facts as they are. You might, however, question the conclusions Mr. Young draws from Asia’s economic lead; specifically, Aberdeen’s spokesman expresses a conviction that Asia stocks will outperform and that those stocks deserve higher premiums over developed world counterparts.

Gold hit another new high. The exchange-traded funds are buying the precious metal. But they may not be the best placement for investors.

An Asia reader criticized my failure to whoop and holler about the new Japanese CB measures (mistakenly called quantitative easing by the Japanese). Rhett Butler in Gone with the Wind is whom I would quote about this, except this is a family newsletter. For political reasons, Japan is trying to control its exchange rate and expansion, but half-heartedly. It will have to go with the flow of the rest of the industrial world. Much of the exchange rate intervention is Kabuki theater.