The FED probably wanted a stock market bubble, but un-intended consequences made it a commodities bubble.

The FED got exactly what they wanted. They’ve devalued the dollar enough to stimulate exports and the “real” economy. It’s not their fault that we also happened to stumble upon peak oil. Collapsing housing bubble + peak oil = the perfect storm. It’s a wonder we’re still managing positive GDP growth.

There is some bubbliness in some commodities (gold is most certainly a bubble, oil and agriculturals are less so) but there are also solid fundamental reasons why commodities cost as much as they do.

I don’t think they can afford to devalue the dollar much further.

inverse funds like SDS and SKF are very volitile

Incidentally, do you know that inverse funds are backed by Fannie Mae bonds? If Fannie Mae fails (not that it’s likely to happen), SDS and SKF could take a big hit.