Ignore the News, the Real GCC Boom is Economic
By Graham Summers
June 11, 2007

It's time to leave ignorance behind us.

Countless times in the last month, whenever I've spoken about investment opportunities in the Middle East, my friends would respond, "You're insane. Don't you watch the news?"

My answer is always the same. "What passes for news in this country is garbage."

To the average American watching FOX or CNN, the Middle East looks like one massive mine field. It's always the same footage: people screaming, cars and flags on fire, and women in burkas shuffling around in 100-degree heat. I'm not surprised people don't feel safe about the Middle East – judging from the news, you'd think that getting shot was part of passing through customs.

A suitable comparison would be if Middle Eastern news focused primarily on the KKK and Neo Nazi movements when covering the U.S. The reality of the situation is that the people of the Middle East who perpetuate these attacks are a very small percentage of the population. For instance, Dubai's murder rate is one-sixth of New York's. And roughly 80% of the people in the city are visitors.

However, the United Arab Emirates (UAE) is booming in another sense. According to its Ministry of Finance & Industry, the UAE's GDP grew by 35% last year.

The Gulf Cooperation Council (GCC) now has a cumulative trade surplus of $560 billion. Semidesert countries such as Saudi Arabia and the UAE now rival more industrial nations such as Switzerland and Germany in per-capita GDP.

GCC governments also control investment funds of astronomical proportions. Abu Dhabi's investment fund, Adia, controls more than $700 billion. Kuwait's investment arm controls a fund estimated at well over $100 billion. In Qatar it's $40 billion. (For reference, the biggest U.S. hedge funds control about $10 billion.)

Individual Western investors may be avoiding this region, but Western banks and corporations are piling in. Every major investment bank you name – Credit Suisse, Barclay's, Morgan Stanley, Citibank – has set up offices there.

In Dubai alone, more than 6,000 companies from over 110 countries have opened offices... 25% of the world's Fortune 500 companies are already there. Even Harvard's endowment is creating a $1 billion fund to invest strictly in the Middle East.

The investment opportunities in this region are tremendous. In the last month, I found a mutual fund that averages 33% a year, a construction company that has a virtual monopoly on Dubai's downtown development, a microcap company that has a monopoly on Egypt's household goods, and a dairy company that is the fourth most recognized brand in the Middle East.

The list is virtually endless...

I'm going to be presenting these ideas and more to readers of the Zurich Letter: a new, globally focused product we're going to launch at Stansberry & Associates in the next month.

I'm not encouraging people to throw their entire net worth into places like the Middle East... simply alerting investors that there are tremendous (and safe) investment opportunities beyond your standard milquetoast U.S. mutual fund.

For instance, I just told readers about the world's most profitable cement company. Its footprint is massive and global... and we're up 18% in one month.

And there's plenty more to come. Stay tuned for more details...

Good trading,

Graham