Great Read!

The United States has long thought of Mexico as a either a drug gang wasteland or the home of Speedy Gonzales.

It was so bereft of opportunity that its huddled masses risked life and limb to swim the Rio Grande and walk the deserts into America.

But this is no longer true.

In fact Mexicans are staying put; many are even returning to their country.

A Pew study found there were 900,000 fewer illegal immigrants from Mexico in 2011 than there were in 2007.

The Christian Science Monitor says: “About 1.4 million Mexicans left the U.S. between 2005 and 2010, double the number who did so a decade earlier.”

They are going back not only because the U.S. is mired in an economic depression, but because Mexico is booming...

Mexico is the world's 14th largest economy, with a per capita income of $14,000.

Manufacturing and industry account for 34% of the economy. The service sector is 62%.

Exports constitute 29% of the GDP ($336 billion) and the nation has a current account deficit of just $11.3 billion.

Mexico's GDP grew 4.6% and 4% respectively in the first and second quarters of this year.

The country has expanding opportunities through record numbers of new jobs, rising levels of foreign investment, and a growing middle class.

The unemployment rate is an enviable 4.8% — versus 5.4% last year.

Mexico's president-elect, Enrique Peña Nieto of the PRI, will take office in December. He has promised to push pro-market reforms that will bring even more vibrant growth to the country.

Mexico: Looking for a Breakout

The stock market is pushing all-time highs. Note the bullish ascending triangle formation:

According to Forbes, this party is just getting started:

The return of the PRI to Mexican politics, Mexico’s pricing powers, and its proximity to the largest market in the world has Nomura Securities saying on Tuesday that over the next decade, Mexico is poised to become Latin America’s largest economy, surpassing Brazil, and become one of the emerging markets’ most dynamic economies.

The banks are solid with GDP-to-debt at only 20% — versus 50% for Brazil and 80% for China — and its population pyramid says it will boom for years to come...

Mexico has no baby boomers to pay for and has lots of young people to fuel demand and push growth over the next several decades.

Mexico Has Gold

But what has me pumped is that Mexico is producing record amounts of gold.

On Monday, the Mexican Chamber of Mining said the country hit a new record in gold production in 2011, reaching 88.6 tons of the precious metal — nearly 22% more than 2010.

This means Mexico has the highest growth rate in the world in terms of bullion production.

Goldcorp Inc. (NYSE: GG, TSX: G) is the biggest producer in the country, with 21.5 tonnes from its mines. Fresnillo PLC. (LON: FRES) is number two. It produced 13.9 tonnes of gold last year.

Mexico just hit number 10 on the list of the world's most producing gold countries — and is climbing fast:

Not only does Mexico have vast untouched mineral deposits, but it is also one of the cheapest places to produce.

The global average cost to produce an ounce of gold is $649; in Mexico, it only costs an average of $325/ounce.

All the best,

Christian DeHaemer

Cheers

w. C. Guy