Most of the reporting on foreign exchange reserves addresses the swelling stocks of Asian countries, namely China, Japan, and South Korea. But, as I have been reporting for several months now, the oil-rich countries of the Middle East are beginning to amass equally impressive stockpiles of reserves. In fact, it is estimated that by 2007, the Gulf Coast Countries will own a combined $500 Billion, with Saudia Arabia leading the pack with nearly $225 Billion. The irony, is that, while protectionists gripe about how soaring commodity prices are inflating the trade deficit, the oil exporters are simultaneously financing our deficit.

“These increases reflect a sharp improvement in current account positions in some countries, and higher foreign investments and other capital inflows in other countries,” IMF said.

Read More: UAE’s forex reserves to reach $29b