As the housing market smolders, a commodities bubble heats up

Commodities may well be the latest bubble, with precious metals and grains futures hitting record highs.

“We’ve seen this bubble move from asset class to asset class over the last six years,” said Tom Willis Jr., manager of commodities-based products at Chicago-based Mesirow Financial Holdings Inc. “I think it’s likely to end the same way as the last two,” he added.

Analysts and traders say the Federal Reserve’s policy of low interest rates is flooding the market with cash and inflating a grains and precious metals bubble. They also say it is part of the cycle that allowed the housing and technology markets to boom—and then bust.

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