Ever see that show on The Learning Channel called Trading Spaces? It has two neighbors swap houses for a couple days to remodel each other’s rooms. There have been some surprising results, from an all black room (which was not what the owners had in mind) to wonderfully tasteful decor.

That’s why it’ll be interesting when two countries swap sectors: the UK could be the next oil frontier and Dubai could be the next major hotel owner in Europe.

Let’s start with the more unusual of the two…

The UK has been beholden to imported natural gas since 2004, and could be a net importer of oil by 2010 once the North Sea reserves really begin to run dry. North Sea oil accounts for 98.5% of UK production. Onshore oil fields produce only 24,000 barrels of oil a day.

To give you an idea of just how little that amount is, 24,000 barrels of oil is less than two-minute’s worth of U.S. oil consumption.

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They say when the U.S. sneezes, the whole world catches cold…

Well, it’s time for a trip to the drug store. More and more often, that means Central and Eastern Europe, or Emerging Europe.

For our Taipan VIP subscribers who attended our August Global Summit conference in San Francisco earlier this month, you may remember me mentioning a couple companies. Big names… Internationally recognized pharmaceutical companies like Teva Pharmaceuticals (TEVA:Nasdaq) and Sanofi-Aventis (SNY:NYSE). They’ve set up shop in places like Hungary and the Czech Republic.

Hungary is one of the most developed pharmaceutical and biotechnology sectors in Central and Eastern Europe. Hungary boasts the strongest biotech sector among the twelve new EU member states. That has enticed seventy core biotech companies to set up shop in Hungary up to now and 170 companies have some kinds of biotech related activities. The reason? Cost savings. Companies can save 30-50% compared to Western European enterprises.

But there’s another side to the drug industry and it’s increasingly finding a home in this very region.

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About four months ago, China’s sovereign wealth fund, China Investment Corp., announced that it would up the amount of money it pours into foreign investments by 30%. Now, CIC has about $90 billion to spend on assets abroad.

CIC has some complex dealings with internal state-owned banks, like the Agricultural Bank of China and China’s Development Bank. Not surprising, since on of CIC’s major funtions, indeed, the reason it was formed at all was to provide financial stability for China’s state-owned banks.

Near the end of last week, China’s Development Bank signed a $100 million loan contract with Banco de Chile (BCH:NYSE).

BCH is Chile’s second largest bank, and has also signed an agreement to open joint credit lines with CDB. According to the press release, CBD wants to invest in Chile’s “ports, bioceanic corridors and junior mining companies.

Chile is a major producer of copper, which is of great import to China. In fact, China’s capital investment in infrastructure like roads, factories, and property climbed 27.3% in the first half of 2008. That’s more than was expected, and this continued growth is sure to keep demand high for industrial metals like copper.

This should come as no surprise to any of you who have been keeping up with the sovereign wealth fund story. Barely a month ago, Kuwait announced it would boost investments in stocks, bonds and real estate in China, India and Japan.

But I did find one interesting story…

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When the U.S. economy fell off a cliff, a bunch of investors fled to the “safety” of booming emerging markets, like China and Brazil.

Turned out to be a good bet for a while, until our credit crisis became a global disease… and even stellar markets had their corrections.

But now, on the slightest bump up in the dollar, some analysts are now questioning whether emerging markets is the best place for your cash. Some say that U.S. stocks are a better bet than foreign stocks.

What’s really going on is that other major currencies, like the euro and the British pound, are being hit by recession fears and the possibility of more bank write-downs.

The dollar hasn’t really risen that much on its own yet. We’re still seeing poor housing numbers and sky-high inflation. There have been bright spots in the U.S. economy, and I won’t deny that things are starting to look better, but a major shift back to holding only U.S. assets in your portfolio is a big mistake.

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