By Wayne Arnold

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Asian stocks are rallying on what may prove a pipe dream. Investors expect weakening exports and receding global credit to make for tough going in the first half, but are betting governments will unleash spending and rate cuts in the second half to offset it. The vagaries of politics make that a risky trade. Stocks are cheap for good reason.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own

Samsung’s $41 billion investment splurge should ring alarm bells at its competitors. At least half of the Korean conglomerate’s planned outlays will probably go to expanding its global lead in smartphones and the chips and screens that drive them. It’s a bold bet in a slowdown, if its bet pays off Samsung could lengthen its lead over the likes of Apple.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own 

Taiwan’s economy should be the winner if the ruling party clinches this weekend’s presidential and legislative elections. A big issue is how fast the island should build trade and financial ties with China. President Ma Ying-jeou wants to go full steam ahead; the opposition would ease the pace. But growth is the more immediate issue. Ma’s party, the Kuomintang, is more likely than his rivals to give Taiwan’s flagging economy the jolt of fiscal stimulus it needs.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

South Korea’s spending spree looks wise. The government plans to spend 70 percent of its budget in the first half of 2012, and will likely throw in an additional Keynesian deficit-spending package. With presidential elections in December, that might seem a sop to voters. But Korea can afford it. And it has so far resisted the less sensible course of weakening the won to boost exports. The rest of Asia should follow its lead.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Hard times bolster the case for hard assets. Printing money to generate growth provides a tempting way out. But that undermines the value of financial assets, and civilisations that depend on workable means of monetary exchange. Servicing sky-high national borrowing without raising taxes, cutting benefits or deepening unemployment is a political nightmare. And while social pressure could undermine financial systems, seized-up finance could send societies into a new dark age. Gold, canned food and shotgun shells may be the safest bets in 2012.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Conventional thinking has it that South Korea will one day absorb its impoverished cousin. But if the North collapses, it could be Beijing that has more interest in propping it back up. Like bailing out a bank, doing so would require China to inject liquidity and capital in return for more accountable management in Pyongyang.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The U.S. Treasury has rightly criticised Tokyo for trying to artificially weaken the yen. Currency intervention of the kind Japan wheeled out after March’s earthquake, and again in October, has a limited impact, and exporters have learned to live with a strong yen anyway. But fears that traders see the yen as a one-way bet mean more meddling is likely.

By Wayne Arnold
The author is a Reuters Breakingviews columnist. The opinions expressed are his own

South-East Asia offers an enticing getaway in a stormy 2012. Growth will slow along with the global economy, but Asia’s emerging economies should still outpace developed neighbours. That’s likely to cool stocks, but as interest rates fall to offset slower growth, government bonds should benefit. The biggest risk is that retreating European and other foreign funds tug currencies down and push bond yields higher. But the risks look balanced. Malaysia, the Philippines and Thailand stand out as the region’s safest harbours.

Even a slowing developing Asia should still manage 6.6 percent growth in 2012, according to Nomura. Economies most reliant on exports, particularly of electronics, will be hit hardest, like Singapore, Taiwan and Malaysia. But these and other developing Asian governments have finances Europe can only envy – even Malaysia and the Philippines have less debt relative to GDP than either Germany or France. That means they can afford to spend and cut interest rates, which should lure more local investors into their bonds.