Well, the Fed's dangerous game has commenced. Yesterday the Federal Reserve Board voted to crank up the printing-presses even harder, setting aside another $600B or so to buy bonds and other assets through June of 2011. This morning, markets are on fire, especially commodities such as copper, cotton, gold, silver, and the grains.

Keep in mind that this is an "experimental" policy on a historic scale. The most powerful central bank in the world is firing up the world's most powerful printing press in a way never used before -- to buy back trillions of its own bonds.

I believe that this is enough to tilt the economy toward a dangerous accelerating inflation, especially one that's already taken hold in the commodity world: commodities such as cotton and sugar are already at historic highs, silver has taken out a new high, and gold is threatening its high.

Protect yourself: Buy commodities, precious metals, and/or farmland. A sudden wave of inflation may be on the way, especially since it had appeared to me that the money-supply numbers had already started to climb before this round of Fed buying.

For those who expect to "sell the news" -- it may still be way to early for that. Think about this: Prior to this action, the Fed was already buying up to $30B a month in assets, including bonds, from the proceeds of its mortgage portfolio (the Fed is now the largest holder of mortgage securities on the planet). That is pumping huge amounts of liquidity into the hands of banks and traders. That was already enough to push up markets across the board since they announced that plan last June. Now they are going to embark on three times as much quantitative easing.

Here's what I think it means for markets:

Commodities: Likely to march aggressively higher. Copper and the grains are moving higher.

Precious metals: I favor Gold and silver. Gold guru Jim Sinclair says that it's going to $1600 by January. Silver has been uncorked by information surfacing about market manipulation.

Bonds: Could continue climbing on the fed buying, but likely to collapse in early 2011. With the massive Fed buying on the way, it still may be too early to short.

Stocks: Likely to continue forward on money-printing, though they are now lagging the performance of commodities, and especially, the precious metals. I  believe this trend will continue. Also, beware the dollar, if it's descent accelerates a currency crisis may begin to pressure the stock market.

Hold on, it's likely to be a wild ride!