What's Bubbling Over Now

GOLD

Price: $948 an ounce

Buyable as: StreetTracks Gold Trust ETF (symbol GLD)

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Gold, which sold for $300 an ounce in 2002, cracked $1,000 on March 17 and fell below $900 by the first week of April before recovering. Gold is seen as a hedge against inflation and political turmoil, but it has little use beyond jewelry.

Supply and demand are remarkably steady, so sentiment is the prime mover of price. Experts link the surge in gold to the weak dollar, fear of rising inflation and the collapse of real estate. Many investors and speculators apparently agree, as volume in gold surrogates -- mining stocks, gold funds and derivatives linked to gold -- continues to rise. Gold won't blow up soon -- it'll just correct as the dollar rallies mildly. The yellow metal should trade between $850 and $1,000.

SILVER

Price: $18 an ounce

Buyable as: iShares Silver Trust ETF (SLV)

Silver's value has climbed faster than gold's, up nearly fourfold since 2004. The silver exchange-traded fund has jumped 50% since August 2007. But the two metals don't always move in lock step.

Silver has more industrial uses, even with film photography slowly going the way of the horse and buggy. As a result, silver correlates more closely than gold with the overall health of the economy.

Silver also tracks stocks more closely. In a global bout of stagflation, gold will get the panic buyers and silver will be an also-ran. Between mid March and mid April, silver fell from $21 to $18 an ounce while gold has held up much better. Silver isn't in bubble-land; it won't collapse like the housing market. It's just not a great buy.

BRAZILLIAN STOCKS

Price: Bovespa index, 62,600

Buyable as: iShares MSCI Brazil Index ETF (EWZ)

The Bovespa is up 33% in the past 12 months and has broken even so far in 2008. The iShares ETF has gained 59% annualized over the past five years (just two commodity-oriented companies -- Petrobras and Vale -- account for half of the ETF's assets).

Brazil is a strong exporter of food and metals, and the country has vast new oil reserves and a strong currency. But the market's meteoric ascent puts it in bubble territory. Foreign money, chasing momentum, is still pouring in. In 2006, foreigners invested a net $15 billion in Brazilian stocks. Last year, it was $26 billion. In January 2008 alone, $3.6 billion arrived. The Brazilian market -- not its economy -- is overheated. Wait for a 20% fall and look again.

STEEL

Price: $880–$935 a tonBuyable as: Arcelor­Mittal (MT), Nucor (NUE), Steel Dynamics (STLD)

Steel prices are up 50% since 2005, and news of another hike seems to come every week. There's no large backlog of inventory to stem the increases, which are the result of rising costs for coal and scrap metal, plus surging orders for construction. Even a deep U.S. recession wouldn't get in the way because so much steel is shipped to Asia, the Persian Gulf and Eastern Europe.

A basket of steel stocks is the way to invest. Even after stupendous share-price increases since 2003, the likes of Nucor and Steel Dynamics still sport price-earnings ratios in the teens. Global giant ArcelorMittal, based in Luxembourg, is up 2500% in five years but still trades at just 11 times earnings.

THE EURO

Price: One euro, $1.58

Buyable as: CurrencyShares Euro Trust (FXE) or euro-denominated CDs from Everbank

From day to day, the markets seem to be of two minds. One day, a blow to the U.S. banking system or a weak economic report adds a penny to the value of the euro. The next day, someone says the currency's high value hurts European exports. The dollar gets the penny back.

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But once Europe's central bank starts acting like the Federal Reserve and begins to cut interest rates to help European economies, the euro should weaken. When that happens, you'll be able to profit by buying a fund, such as ProFunds Rising U.S. Dollar (RDPIX), that benefits from a stronger dollar. An ETF with the same goal is PowerShares DB US Dollar Index Bullish (UUP).

"Cracks are beginning to show in the euro zone," says Kathy Lien, chief strategist for Forex, a currency brokerage. "If the economy there continues to slow, we could see a big dollar recovery" in the second half of 2008. That big recovery could reduce the euro's value to $1.40.

CRUDE OIL

Price: $111 per barrel

Buyable as: U.S. Oil Fund ETF (USO)

Black gold should cost more in real (inflation-adjusted) dollars than it did a few years ago. Spurred by the rapid growth of emerging markets, particularly China, global oil use has expanded more quickly than overall worldwide economic growth; the two used to move hand in hand.

So far, energy companies have been able to bring on enough new supply to meet the extra demand. Finding and producing new oil is costly, so, looking ahead, expect the price of crude to exceed $100 a barrel more often than not.

But the speed of the climb to today's price is ahead of schedule, so figure on oil dropping about $20 per barrel later this year. That's still a higher floor than ever, a reflection of the weak dollar (in which crude is priced) and enormous speculative volume in oil futures.

When traders see gasoline use in the U.S. ease and when the dollar regains some ground against the euro, profit-takers will force down the price of oil. The ETF tied to the price of crude is a good buy if oil comes down to $90.

GRAINS

Price: Wheat, $9.15 a bushel

Buyable as: iPath Dow Jones–AIG Grains Total Return Sub-Index ETN (JJG)

The notion that increasingly wealthy Russians, Chinese and Indians are behind the insane surge in the prices of corn, wheat and other grains is only partly true. Another big reason: Corn and soybeans are being diverted for use in ethanol and other biofuels. The weak dollar is also a factor in soaring grain prices, which have more than doubled since 2006.

No wonder grains have attracted gobs of money and prices have inflated into a classic bubble. Doane's Agricultural Report says hedge funds, futures funds and individual speculators are behind the volatility, not weather forecasts or other factors that touch on supply and demand. As better opportunities crop up elsewhere, speculators will leave.

This is high-risk stuff: When crops fall, they crash. The price of corn plunged 41% between 2004 and 2006, and soybean prices fell nearly 50% between 2004 and 2005. Wait for losses of similar magnitude before venturing into the iPath exchange-traded note.

TREASURY NOTES

Yield: Ten-year note, 3.5%Buyable as: iShares Lehman 7-10 Year Treasury Bond ETF (IEF), or directly from www.treasurydirect.gov

If you buy a long-term Treasury today, you're an instant loser. Consumer inflation is rising at a 4.0% rate, with food, fuel prices and utility bills rising faster. That means the real interest rate is negative -- even before you consider income taxes.

The bond market still follows the old-time religion that recessions mean falling interest rates because of slack demand for credit. But the government's borrowing needs are apt to accelerate, not slow, in 2008 and beyond, adding to the supply of Treasuries.

Since 1990, ten-year notes have normally yielded two to three percentage points more than the consumer price index. Thus, the odds are overwhelming that the ten-year note will yield at least 5.5% in coming years. As yields rise, prices on Treasuries will fall. You can hedge your bond holdings with a fund such as ProFunds Rising Rates Opportunity 10 (RTPIX). Its price is designed to move inversely to that of the ten-year Treasury.