The massive monetary stimulus developed nations have put in place to avoid deflation may cause bubbles in emerging market nations, says Business Insider columnist Vincent Fernando.

Central banks in developed nations are printing money by the ton, and investors are putting that cash to work in emerging markets.

Even if emerging market countries raise interest rates, capital should keep flowing there as investors seek higher returns than the low rates available in developed nations, Fernando argues.

He cites an International Monetary Fund report that backs his reasoning.

“Continued easy (monetary) policies in AEs (advanced economies) could push even more capital to EMs (emerging markets),” the report says.

“Overall, such inflows are just returning to pre-crisis levels. Although they do not generally pose a problem yet, surges in such flows going forward may complicate policy challenges for EMs recovering quickly from the crisis,” Fernando says.

“Emerging markets could be the next bubble we inflate.”

Such a bubble would represent an ironic twist. Part of the reason why investors find emerging markets attractive now is because those countries stayed away from the excess leverage and risk that caused the financial crisis in developed nations.

And now that wise financial conduct is attracting the very foreign capital that could spark bubbles anew.

Famed short-seller James Chanos, for instance, and other experts have called China’s property market a bubble for months.