The major geopolitical story this week continues to be Egypt. Egypt may be the canary in the coal mine for the emerging markets.Although Egypt grew four to six percent per year over the last several years, it's hard to imagine anything like that continuing when food prices are where they are.Spiking commodity costs continue to pressure developing nations. If these high food prices can dent the progress of Egypt it is possible that we could see similar disruptions in various other emerging markets as well.As emerging markets are still in the commodity-intensive phase of their growth curves, this means, at the very least, the arc of their economic growth rates ought to flatten out for a time. At worst, they are vulnerable to social unrest, as most also have large poor and commodity sensitive populations.In China, for example, authorities continue to tighten monetary policy to prevent an inflationary spiral. This is already slowing the economy, as evidenced by the rapidly declining Leading Economic Indicator.Frontier markets - like Nigeria and Vietnam - seem to be the most likely candidates for something disastrous to go wrong. The Nigerian government recently managed to lose about $20 billion for “unexplained reasons” from its oil savings account.Vietnam has a classic overheating economy in which it is rapidly running down its foreign currency reserves which seem to be set to disappear by October - devaluation shortly follows in these instances. Clearly, risk is rising on the peripheral economies of the world.At this stage I would at the very least raise the caution flag on emerging markets. The best way to invest in emerging markets now is probably through diversified multinational companies with strong finances in strong niches. In fact emerging markets are down roughly 2.5 percent versus the US market posting gains in excess of four percent so far this year.One can capitalise on the higher growth rates available in developing economies without the added risks of trading in a foreign exchange that lacks the transparency, consistency or legal protection that is offered in US exchanges. This strategy not only provides some downside protection in the event of a sluggish recovery but also provides plenty of exposure to the United States in the case of a more robust domestic recovery.In recent years, companies such as Procter & Gamble (PG) and Wal-Mart (WMT) are reaping benefits from their global exposure, as rapid growth of their international business segments augments the slowing sales growth in the domestic US market. For example, 62 percent of PG's sales now come from outside the US.Long-term, the appeal of emerging markets is the growth you get investing there and this secular story remains intact. In the near-term, however, a hiccup seems likely. Every stock guru loves the developing country story and they keep telling you that you “have” to own them.Emerging market stocks, however, are not cheap - the MSCI Emerging Market Index now trades at a whopping 24 times earnings compared to the MSCI Developed World Market Index of about 16 times.I think the downward pressure from inflation and interest rate worries will limit any rally in emerging markets and keep these markets under pressure for a while yet.