Goldman Sachs (GS) Chairman and CEO Lloyd Blankfein told CNBC that he'd be "long, not short" emerging markets in the long term, despite the sharp selloff in their currencies Friday.
Blankfein-who appeared on CNBC's " Squawk Box " in an interview from the World Economic Forum in Davos, Switzerland-did caution that emerging market currencies are high yield but also high risk.
"If somebody said, 'Take a position on the emerging markets and you can't change your mind for fill-in-the-blank-one year, five years-I'd be long, not short. It doesn't mean I'm going to feel good about it," he said.
(Read more: It's getting ugly inemerging market currencies )
The emerging market currency risk has become a macro event, he added. "All of these countries that are far apart on the globe are very close in investors' minds."
Emerging markets currencies came off their lows, and equities responded, with futures recovering from their steepest losses Friday. But Marc Chandler, chief currency strategist at Brown Brothers Harriman, said the market was looking forward to more volatility around the morning's options expiration at 10 a.m. EST Friday.
Blankfein stressed that over the longer term, there are opportunities in emerging markets. "You see growth, education, mobility in these countries. Basically, the flattening of the world has given tremendous opportunities in these countries."
For example, the Goldman chief said Mexico feels like a different and energized place now.
As for the U.S. economy, Blankfein said he's still optimistic about the economic prospects for U.S. "There's a big tailwind ... the deleveraging that's occurred, the interest rate environment, the housing situation, the energy-all of it favors the United States."
But growth here won't exceed the high side of expectations because the bar has been risen. "Expectations are in line with reality."
The recent U.S. stock market drop should be viewed relative to the high levels that stocks are still trading, he said-adding market sentiment shifts happen when investors think they're no longer playing with "house money" and they're using their own.
He asaid that U.S. sentiment is not grasping the positive impact of the surge in domestic energy production.
On Europe, Blankfein said the economy is doing much better than two years ago.
He said China doesn't really have a mechanism for writing off mistakes, and it needs to do more to develop its capital market.
(Read more: Lloyd Blankfein: 'This could be China's century' )
On the issue of banks paying out big fines to the government, Blankfein said mistakes are not necessarily crimes.
-By CNBC's Matthew J. Belvedere . Follow him on Twitter @Matt_SquawkCNBC.
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