Germany experienced a sharp recession following the subprime collapse in the U.S. But since then, its economy has staged an impressive rebound.

When you think of economic miracles, you tend to think of China…or Brazil…or India.

These are the basket cases turned good – the wayward teenagers who ended up studying hard…going to a good college…and coming top of their class.

These economies stand out because their transformation has been so obviously spectacular. And the giant steps these emerging economies have taken over the last 30 years have rightly impressed investors.

But the fixation with these Asian and South American bad-boys-turned-good causes global investors to ignore one of the most solid economic performers in the world today.

You see, right now it’s not the economic miracles of the New World that deserve your attention, it’s an economic wonder much closer to home.

I’m talking about Germany.

I happen to live in Berlin. So I’ve experienced the Wirtschaftswunder (literally “economic miracle”) firsthand.

Trains arrive on time here. Crime is low. Social services are some of the best in the world. And property prices have avoided entering bubble territory.

Germany – a leading developed economy – is off our regular beat here at International Living Investor. But the investment case is compelling.

Germany experienced a sharp recession following the subprime collapse in the U.S. But since then, its economy has staged an impressive rebound.

German GDP (a measure of total economic output) grew 3.6% last year. That’s about 24% faster than U.S. and without all the money printing and stimulus spending.

And as America struggles with a record high jobless rate, Germany’s jobless rate hit an 18-year low in January after the number of people out of work fell by over 3 million.

This strong performance is filtering through to the German population. According to the The Economist, Germans entered 2011 in their most optimistic mood since 2000. And business confidence there is at its highest level since tracking began 20 years ago.

Strange as it may seem to the ears of an American, Germany isn’t trying to ‘fix’ its economy by printing boatloads of cash. As a member of the euro zone, it can’t simply crank up the printing presses. The European Central Bank in Brussels controls money supply.

No. Germany’s recipe for success is simple. Almost old fashioned. It exports well-made products that the rest of the world wants to buy at a premium to production costs.

In fact, Germany (with a population of 81 million) exports about 5% more in dollar terms than the U.S. (with a population of 312 million).

You’ve probably heard of BMW. It makes great cars. Less well known is BASF. It’s the world’s biggest chemical company. Another big exporter is Henkel. It makes American consumer product brands Dial soap, Right Guard antiperspirant, Loctite glue and Purex laundry detergent.

4 Reasons Why Germany Is a “Buy” Right Now

Germany is benefiting from some major tailwinds – each one of which is boosting its economy and buoying up stock prices.

1) Chinese demand – Germany is doing particularly well right now because it produces things China wants: Audis and BMWs, but also high quality machinery for China’s manufacturing industry.

2) Access to cheap labor markets – Germany happens to be right beside the cheap labor markets of Eastern Europe. This helps keep its manufacturing costs low.

3) A weak euro – With debt worries still hanging over the euro zone, the euro has remained competitive versus other big world currencies. This has given German exporters a keen edge over their competition.

4) Smart labor laws – When the downturn hit, German corporations didn’t go on the downsizing spree that their U.S. counterparts did. Instead, with the help of government money, they held onto their skilled workforce. This made them able to respond quickly to the economic upturn.

A good way to think of Germany is as the China of Europe – a strong export-driven economy without the worries of an overheating property market, a high inflation rate and a Communist party running the show.

That makes Germany a strong “buy” in my book.

There are two main routes into the German growth story for U.S. investors.

You can either choose to invest directly in a U.S.-listed German company such as electric engineering giant Siemens AG (NYSE:SI) or software solutions leader SAP AG (NYSE:SAP).

Or you can buy into a basket of top German stocks by way of the big German ETF, the MSCI Germany Index Fund (NYSE:EWG).

Both routes will give you access to one of the most solid economies in the world today.