But even though the country's economic growth is expected to slow, it is still projected grow +4.5% in 2008 -- about three times faster than the U.S. economy.  And considering South Africa's challenges, the nation's nearly +5% growth rate speaks volumes about the power and longevity of this boom. 

     Furthermore, I think gold -- driven by worldwide inflation -- is only pausing now and soon will resume its upward trend.  If that happens, South African corporate earnings will keep the country's bull market moving forward.

     Economic Powerhouse in an Emerging Region

     Longer term, South Africa is the financial and industrial center of sub-Saharan Africa; while this part of the world remains trapped in poverty, it's no stretch to imagine the continent eventually following the path of other emerging markets in the post-Cold War era.  Western investment in Africa is picking up steam, as are efforts to combat HIV/AIDS and other pervasive health problems.  As the continent's economic growth picks up, South Africa will surely be a major beneficiary. 

     In short, South Africa is in the catbird seat of one of the fastest-growing segments of the world economy: mining commodities, particularly gold.  In addition, it's a large developing market with established industrial and financial sectors, surrounded by smaller states likely to experience above-average economic growth in the coming years.  In fact, the opportunities in South Africa today remind me of conditions in China not long ago -- on it's path to become the world's best investment opportunity in recent years.

     Rebounding Currency

     Note that South Africa's currency -- the rand -- has pulled back -12% versus the U.S. dollar this year, making it one of the only currencies the dollar has gained against.  The main reason for this fall has been higher-than-expected inflation.

     However, with interest rates so high, it's unlikely the rand will continue to fall significantly.  After all, big institutional investors are pouring ever-increasing sums of money into South Africa in an effort to profit from "carry trade" investments.  This strategy -- whereby foreign investors borrow money at low interest rates elsewhere and deposit them in South African bonds at high interest rates -- should be a stabilizing factor for the rand in the coming months.  Thus, I expect the rand to appreciate over the next 12 to 18 months.  (In fact, it has already rallied about +3% in the past two weeks).

     Capture 9.3%  Dividend Yields and +314% Capital Gains

     South Africa's booming commodity sector is fueling growth throughout the country.  And the nation's high interest rate environment is supporting outstanding yields in some safe and stable stocks.  

      Just this month, I profiled one of my favorite South African stocks in the pages of my premium newsletter . . . High-Yield International.  You can capture a 9.3% yield with this secure investment, and while this stock is from a noted safe sector, it's no sleeper -- having delivered capital gains of +314% over the past five years.  And as an added bonus, if the rand bounces back from its lows, as expected, then investors are going to reap even greater returns as their income appreciates right along with it.         

     If you'd like to learn the name of this stock -- plus receive a steady stream of foreign stocks, funds, and other investing ideas with abnormally high dividend yields each and every month -- then I'd like to extend you a personal invitation to try my premium investing newsletter . . . High Yield International.
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