The World Cup scheduled for 2010 in South Africa is showing deep cracks in the country’s economy — positioning investors to reap gains of 129%.

FIFA and UEFA (that’s Fédération Internationale de Football Association and Union of European Football Associations to non-football folks) are becoming increasingly vocal about South Africa economic woes.

You see, South Africa’s having a bunch of problems this year, and some authorities are saying the problems aren’t going away anytime soon. Here’s what I mean…

– GDP growth came in a 2.1% (compared to expected growth of 4%) in Q1 2008.
– Inflation hit a five-year high of 10.1% year-on-year in April (interest rates were raised to 11.5%).
– Unemployment is incredibly high (at between 20% and 40% - that’s official vs. unofficial numbers).

But for the soccer organizations perhaps the worst drawback is South Africa’s undependable electricity supply.

In January 2008, Eskom Holdings Limited (ESKAY:OTC), South Africa’s state-owned electricity company, began cutting power exports because of shortages at home. Since then, reports have been flooding in that Eskom is “load shedding” in South Africa’s middle-class suburbs. Load shedding is abruptly cutting power when demand exceeds supply.

Those power problems could persist for the next 10 years, and that’s precisely what FIFA and UEFA are concerned about. Of course, this problem is not strictly isolated to soccer.

It could lead to job cuts at South Africa’s massive mines, and companies like Gold Fields, Inc. (GFI: NYSE) and Anglo American (AAUK:NASDAQ) could be cutting jobs and losing production. And that’s been leading to social shake-ups and as many as 68 people have died in socio-economic violence.

South Africa’s stock market has been riding high. In fact, it has more than tripled over the last few years.

But the bad news out of Cape Town is about to bring it all crashing down… However, as with most crisis situations, there are hidden opportunities. (In fact, savvy investors are already positioning themselves for a quick 129% gain.)

South Africa is fighting to dispel rumors that it could actually lose the 2010 World Cup. Unfortunately, Eskom’s load-shedding incidents are occurring at least four times a week and are starting to decimate South Africa’s economy.

Cape Town had been warned that these power shortages were coming. Eskom had informed President Thabo Mbeki that it needed more investment dollars to increase capacity. But the government didn’t listen. Now, South Africa is sinking… and the problem is getting worse.

Anglo American (LON: AAL), the world’s largest producer of platinum, says prices will soar by 50% due in part to power supply problems in South Africa. Platinum production could fall by 200,000 ounces this year, wiping out $397.4 million in revenue.

Gold Fields (NYSE: GFI) says that South African gold production could fall as much as a staggering 25% drop because of these power cuts. The industry would have to cut nearly 7,000 jobs.

To top it all off, Eskom is trying to increase its tariffs by 53% to help fund massive investment projects to increase its generating capacity. But the government is broke, and the South African Reserve Bank was forced to raise interest rate to 11.5%.

This is just the beginning. Eskom has confessed that South Africa will face power shortages for the next five years.

Bottom line: South Africa’s power problems are crushing the South African economy and the entire country is going to feel the pain.

GDP growth came in at half its expected rate in the first quarter of 2008. At the same time, inflation hit a five-year high. And worst of all, unemployment is at a startling 20%!

With no end in sight, foreign investment is bolting from South Africa… and the stock market gains of the last few years are about to implode.

Take a look at the chart below. It’s from Sara Nunnally, editor of Taipan Trader.

According to Sara’s research, the South African market has crossed into dangerous territory. It will not only likely fall… it will tumble hard!

Now if you’ll recall I mentioned that buried in every crisis is a hidden opportunity. Sara has isolated a safe, simple investment that will soar as South Africa’s market tumbles. In fact, Sara expects it will return a 129% gain.

This investment is easy to buy. In fact, you can own it without sending a single dime overseas.

Now here’s the thing: Sara’s research is spot on. Most every time she makes a prediction about an event happening in a foreign country, it comes true. She is the group’s most knowledgeable source on building wealth through foreign markets.

While Sara has already recommended this investment to her Taipan Trader readers, it’s not too late for you to participate in these gains.

For more details, please visit the Taipan Trader web site.

–Sandy Franks

Source: Upcoming World Cup Reveals That South Africa is in Shambles: 129% Profit Strike on the Horizon!