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If you aren't South American and your main school of foreign affairs is Hollywood, then the name probably arouses images of speed-boats loaded with cocaine making for Florida, foul-mouthed drug barons in limousines surrounded by beefy bodyguards armed with semi-automatics, and hair-raising descriptions of thousands of people and children being kidnapped.

And what about the Bogota stock market, which has risen fourteen-fold inside five years? Does "Colombia" spell foreign investments that doubled in value? Property prices that have tripled, beachfront homes selling for the highest prices in the world?

That - is that the same Colombia, coke capital of the world, shunned by the world tourism trade?

Yes: a quick Internet search will show you that Colombia is not what you thought, which is probably that it's one of the most dangerous countries in the world, sitting in a continent known for its frequent economic meltdowns. In fact, it's become a major darling of the world investment community.

It is what they call an extreme emerging market, together with the likes of Lebanon, Namibia, Oman and the Ivory Coast.

But what was thought of as "extreme" has been approaching the "mainstream" in the last couple of years. The index of "extreme" stock markets rose no less than 400% in the last five years, though many of the countries, intellectual property protection and accounting and disclosure rules are far from developed.

The fuel behind the sharp gains in some of these "extreme" markets is economic reform coupled with powerful economic growth. In Colombia, for instance, inflation was tamed, dropping from 18% to 5%.  But the big story in Colombia is the same one driving other stock markets elsewhere in the world: a spike in investor confidence, and a trough in the risk they associate with investments.

Rise, and fall

The world financial markets have known euphoric times before. But this time, the good times aren't being driven by small investors storming the stock market. They're being driven by cheaper credit than ever before.

The cheap credit is enabling companies to buy back their shares. It is enabling private equity funds to lend astronomic amounts at bottom-crawling spreads and to buy publicly traded giants.

Israelis are convinced, as usual, that the local boom is a uniquely Israeli story. They stand open-mouthed before the massive influx of foreign capital to Israel, and at the miracle of interest on the shekel being lower than interest on the dollar.

But the truth is that much the same is happening elsewhere too. Chinese share prices tripled in a year. Europe is frothy and Colombia and its ilk have morphed from poison for investors to picks.

Some economists say it's a new economic era: no inflation, global, flat, efficient, and that China and India are greasing its wheels, that it's immune from the cycle of rise and fall.

Others say that the credit and asset prices are a bubble that will burst one day.

Are you bemused by the dissonance of Israel's government crumbling, while asset prices on the Tel Aviv Stock Exchange soar? Muse on this: the huge flows of money washing over world markets. And the day the global herd suddenly remembers the risk is the day the is going to change, hard and fast.