The one thing the government can and will do in this type of market environment is create more liquidity—they’ll make borrowing easier.

And, in essence, create more cash.

You’ve seen this already in the surprise Federal interest rate cut last week. That move is probably only the beginning.

You see, precious metal companies typically do incredibly well in this environment.

As Forbes just wrote on August 20, 2007 in an article called “Federal Reserve Could Start A Gold Rush”:

“The Federal Reserve is mulling a federal funds interest rate cut; a move that could buff the luster of gold miners. RBC analyst Stephen Walker says that gold equities have charted significant gains during rate cutting cycles by the Fed…”

And we believe we are still at beginning of a big precious metals bull market.

As you probably know, commodity precious metals have nothing at all to do with subprime mortgages, or exotic credit derivatives…

With gold at around $650 an ounce today, Bloomberg reports: “Gold may reach $2,000 an ounce by 2010.” And Michael Lynch-Bell, head of mining and metals at Ernst and Young, says the potential is “virtually limitless.”

Consider this: Since 2001, both gold and silver are up over 100%…

The right precious metals stocks have done even better.

There are simply too many to name… but some notable stocks have made investors a lot of money since 2001—such as Southern Copper (2,303%), Silver Standard (1,554%), and GoldCorp (325%), to name just a few.

Our resident expert in precious metals stocks is Matt Badiali.

Matt—a geologist by trade—is the lead analyst of the S&A Gold Report. In the time Matt has been following the commodity metals sector, some readers who bought his recommendations have written in to tell us that they made very good money…

Among the precious metals companies Matt has recommended are Seabridge (159%), Southern Copper (119%), Cumberland (93%), and Zinifex (76%)…

So we asked Matt to tell us the #1 “correction” stock he would recommend right now…

It’s a remarkable business that allows you to buy gold for just $72 an ounce (Remember: The price of gold today is over $650).

And while shares trade right here in North America, the company’s biggest mining project is in a country where they are the only company that’s gold mining here.

In other words, this company—like Dan Ferris’ favorite “correction” stock—has a huge “moat” of safety around its business.

As Matt puts it, right now this small gold stock “trades at levels that could hand us a triple-digit winner this year.”

If you want to protect some of your money from the current correction—however long it lasts—the small gold company that is Matt’s #1 favorite “correction” stock is a great way to do it.

Even better, you have the opportunity to make potential triple-digit gains, in a valuable, in-demand resource.