"The number one reason I like gold is because of inflation -- now a big problem in the emerging markets and the major economies," says resource expert Eric Roseman.
In his industry-leading Commodity Trend Alert, he says, "One of my favorite companies in the world is Goldcorp (NYSE: GG)." Here, he looks at this gold mining firm.
"Inflation sits at a nine-and-a-half-year high in Asia at 7.5%, a 15-year high in the Euro-zone at 3.7% and in the United States it's at 4.2% -- if you believe government data in the first place. I don't. I say inflation is running closer to 10% in 2008, not 4.2%.
"The cost of living, mainly in food and energy, is now totally out of control and destroying business margins and eroding the purchasing power of consumers, especially in the emerging markets where food and energy consumption devours more than 65% of wages.
"It seems very obvious to me that Asian governments have now lost control of inflation. The same applies to the Gulf countries which peg their currencies to the dollar. And in Europe, the European Central Bank is freaking out because of high inflation.
"But the Fed, stuck in a bad rut because of housing deflation, a credit market crisis and rising unemployment, must relent to inflation for the time being. That ultimately means a higher gold price.
"One of my favorite companies in the world is Goldcorp. Every investor should own this company. I'm still forecasting a $75 target for Goldcorp before this bull market is over. But, I'm beginning to think that maybe $100 might be more realistic.
"Goldcorp might not be the cheapest mining concern, but it sure packs a punch. A wave of acquisitions has given Goldcorp 43% production growth between 2007 and 2012, which ranks as the best among the large-cap producers.
"Plus, GG has low cash costs per ounce and manages properties in friendly mining jurisdictions. If you're going to own just one gold stock, Goldcorp should be that ticket. In 2008, she's already up 37%."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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Reader Comments (Page 1 of 1)
7-19-2008 @ 6:54AM
stephen said...
great artical i am a strong beleaver in gold and unfortionitly not in the ecomany