Americans have a very short memory – so I'll remind them of the last two bubbles that blew up in their faces after government regulators lay down on the job (or were bought and paid for by the same people they were supposed to be regulating). The first on was the "dot-bomb" bubble that burst back around 2001. The second was the housing bubble, which blew up in 2008 – after which then-President George W. Bush handed out billions of taxpayer dollars to the same bankers and Wall Street firms who caused the crash in the first place (those who think Obama would have done better can take no comfort, as a senator, he voted for it and as president, probably could and should have done something to stop it and bail out the victims instead).

This time, it's farmland. In Iowa alone, land that was selling at $6000 an acre in 2010 is now being auctioned off at $10,000 an acre as farmers, looking to cash in on the ethanol boom and soaring prices of cereal crops and soy, start expanding their holdings. Unfortunately, we've seen this movie before – back in the late 1970s. That's the last time farmland values went this high. Before that, it was right around World War I, when the demand for American agricultural goods – first from Britain and France, then the U.S. military – made farming very lucrative. But when the "War to End All Wars" was over, so were the good times – and ultimately, families like the Joads lost everything and wound up moving to California.

There are a few differences between the late 1920s, the late 1970s and today. Farmers are carrying less debt than they did back then (one of the reasons farmers like Pa Joad lost their land is because during World War I, they took out some sizable loans to expand their farms and buy those new-fangled steam and gasoline tractors). However, today's farmers may be making the same mistake that homeowners did in the run-up to the disaster of 2008 by taking out second mortgages on land they already own – at inflated values that may stay inflated, or may not. There also appears to be an assumption that prices on commodities are going to continue to rise...

Here's a little word of warning, at least to those speculators who are banking on increased demand for corn-derived ethanol...enjoy it while you can. As this speculation continues to drive food costs up across the board, particularly in countries where people can least afford it, there's going to be increased rage – and trouble...and anything can happen. The other side of the equation is that as things stand, algae is showing a whole lot more potential as an alternative fuel than corn - because over half of its weight consists of usable oil as opposed to corn, which is only about 20% - and nobody eats algae.

Beyond that, my advice is to tread carefully – because you know the law of gravity, which seriously applies to financial markets as well as physics.