Silver has led the pack, rising an astonishing to 55% since December 31, 2010. Crude oil is up a handsome 24%, while gold has been a bit of a laggard, gaining only 10% during the first four months of this year.

Cotton was up as much as 53% in early March, but has crumbled from that peak, holding onto a mere 10% gain this year. On the other hand, copper is actually down 4% in 2011, and lumber is down a staggering 27%.

What does this all mean?

Clearly, silver and gold are being bought -- and bought hard -- because they represent an alternative to increasingly worthless fiat currencies. Flat currencies are any money declared to be a legal tender by some governmental entity, and every major country in the world relies on these bits of paper that have no real value other than that stated by the issuing government. The Dollar, Euro, Peso, Yen, Yaun, etc. are all in reality worth no more than a piece of loose leaf paper.

So investors run to the precious metals with the hope that, when all else fails, they will continue to hold value.

The U.S., Japan, and the EU have all relied on printing more and more worthless bits of paper to fund excessive spending and bailouts. Gold and silver will likely continue to rise in the long run, since there are few alternatives to real value.

This doesn't mean that it won't be a bumpy ride. Silver in particular had an average 6% range each trading day last week! That is a tremendous amount of volatility. From a trading standpoint, it's very easy to get run over in that type of market.

While gold had a tremendous week last week, this run might just be getting started. Last May, Barry Ritholtz published an interesting chart on his blog, The Big Picture. When financial markets are in crises, gold skyrockets to a large multiple of the S&P 500. During the Great Depression, gold reached 4½ times the S&P. In the 1970s, a tough decade for U.S. markets, gold reached 2.7 times the S&P. When gold hit its inflation adjusted peak during the recessions of the early eighties, the metal reached a staggering six times the S&P.

Historically, over the last 80 plus years, gold has averaged about 1½ times the S&P. Currently gold is trading at just 1.15 times Friday's closing price of the S&P 500. So, either gold has a long way to go higher, or the market is in some serious trouble.

Clearly, with the S&P hitting a new 52-week high last week and Bernanke clearing the way for continued easy money for at least the next six months, it's hard to be too bearish on stocks. This suggests that the yellow metal has some serious upside -- almost independently of where stocks go.

Numerous technical indicators suggest that stocks have some upside as well. Certainly, thus far this earnings season has been extremely positive. I'm not going to belabor the concerns about our country's deficit and the impact future Fed tightening might have on our economy, but I think it's important to consider the commodity laggards this year: lumber and copper.

Is Economic Strength an Illusion?

What does a collapse in lumber prices and weakening in copper tell us?  These are demand-based commodities driven by economic growth. When the global economy is expanding, building new houses, new factories, and the like, it needs lumber and copper. When it's not growing, demand for these commodities falls off. Given the price action of these two commodities, perhaps the global economy is not a strong as people are being led to believe.

Japan has a massive rebuilding ahead of it as it recovers from the devastating effects of the earthquake and tsunami. China, in theory, is growing at a blistering 7 to 10% per year. The U.S., despite posting a somewhat lackluster first quarter GDP growth last week, is still expected by many to grow by more than 4% for the full year 2011. Common sense suggests that, between these top three economies, there should be significant demand for both lumber and copper.

The bottom line here is that gold and silver are likely to continue their upward trajectory as investors worldwide seek to replace questionable fiat currencies with true stores of value. Additionally, while the stock markets may continue to run in the face of QE 2.5, keep an eye on those less watched commodities that may be telling us that this strength may not last.