Two moons are turning the tides in emerging markets, according to Michael Power, Strategist at Investec.

China's dwindling demand for the resources exported by developing nations is an old narrative.

Years of declining growth rates and rising unemployment have caused lasting damage across the emerging world.

But it's the other moon, represented by the US Federal Reserve,

which is now causing particular consternation.

The Fed is the definitive source of global financial liquidity,

and the surge in landing to developing countries that propelled much of their growth in the last 15 years

has now come to a halt.

This may give way to a vicious circle of deleveraging, according to the Bank for International Settlements,

which is known as the central bank of central banks.

The developing world accounts for more than half of global economic growth.

Their misfortunes cannot but rebound upon the West.

The total stock of dollar denominated credit in bonds and bank loans to emerging markets

was 3.3 trillion USD at the end of September.

That's down from 3.36 trillion USD at the end of June.

And the irresistible allure of cheap credit inspired households from Brazil to Thailand and Turkey,

to spend beyond their means.

Injecting more liquidity into an engorged financial system with quantitative easing,

may now be doing more harm than good in the developing world.

Investors are deserting emerging market assets in droves.

Capital outflows hit an estimated 735 billion USD last year.

That marked the first year of net outflow since 1998, according to the Institute of International Finance.

Christine Lagarde, managing director of the International Monetary Fund

warned last week of the threat to global growth,

that an impending crisis in the emerging markets would pose.