Inflation can be good for some investments, says John Schuler. And right now Uncle Sam is making damn sure we see inflation in the coming year. Gold is a traditional safe haven when prices soar. That’s why John says these five small-cap gold miners should get a huge boost to their share price in 2009.

This from Penny Sleuth:

With yesterday’s rate cut, and with the bailout money in excess of
$1 trillion by most estimates, it appears as if the government is
setting the stage for massive inflation in 2009. So, what’s in it for
you?

Inflation is the silent predator that’s constantly stalking your
retirement savings.  Normally, you have to outpace inflation to stay
ahead of the game, and realize any significant returns. But, in some
cases, inflation can be good for your investments.

Today we’ve found five penny stocks that could actually rise in value as the dollar falls.

With the Treasury printing money like its going out of style, and
with the bailouts ongoing, the government is in danger of creating a
huge inflationary bounce back in the wake of this economic crisis.

So, how can penny stock investors profit from the pending inflation?  Well, why don’t we take a look at what gold did yesterday:

The spot price of gold jumped from $840 to
near $860 after the rate cut was announced yesterday.  The gold rally
continue this morning, with gold rising to as much as $880.  In less
than 24 hours, the spot price of gold increased by roughly 4.76%

Take a look at what our colleague Ed Bugos, editor of Gold & Options Trader, said recently about gold:

“The fundamentals are significantly
bullish for gold. I’d like to say they are bearish for the dollar, but
in truth, they are increasingly bearish for all paper currencies.
Outside of the Bank of Japan, everyone is inflating madly.”

Higher inflation means higher gold prices. It only make sense that
if there are more dollars in circulation, and each dollar is worth
less, than it will take more dollars to buy an ounce of gold.

Since Dec. 5, when the price of gold fell below $760 per ounce, it
has increased an astounding $120. That’s a 15.79% gain in a matter of
only 12 days.

Now is a great time for penny stock investors to buy up stock in
gold miners. Many of these gold stocks have been slammed over the past
few months, and they can now be picked up at extremely cheap prices.

Our friend Dan Amoss, editor of Strategic Short Report,
suggests that investors take a look at precious metal stocks as the
inflationary storm approaches. “How can you profit from this
unprecedented inflation,” Dan asked, “By owning precious metals and
precious metals stocks.”

As the dollar becomes weaker, and gold prices continue to rise, gold
miners could see a huge boost in their share price.  Below are five
small cap miners with a share price below $10 and with a market cap
under $1 billion:

• Apollo Gold Corporation (AMEX:AGT) is involved in
  the acquisition, exploration and development of gold deposits, with
  current projects in the United States, Canada, and Mexico
• Aurizon Mines Ltd (AMEX:AZK) is a Canadian gold
  producer focused on developing its site in northwestern Quebec.
  Aurizon is also conducting the exploration of three additional gold
  projects in the Quebec region.
• Fronteer Development Group Inc. (AMEX:FRG) is
  another Canadian-based gold exploration company.  In addition to its
  Canadian projects, Fronteer also has sites in Nevada and Turkey.
• Ivanhoe Mines Limited (NYSE:IVN) is an
  international miner focused on the Asia Pacific region.  Ivanhoe is
  currently exploring multiple sites in China and Mongolia.
• Minco Gold Corporation (ADR) (AMEX:MGH) is
  involved in the acquisition and development of gold properties in
  China.  At this time, Minco has five gold projects throughout China.

So, check out these miners for yourself and see what you think.
Feel free to post your thoughts on these companies in the comments
section, as well as any other gold miners you might come across.

Source: Gold Penny Stocks Should Bounce After Fed’s Rate Cut