The din from the commodity pits on the Chicago exchanges is growing louder. Real estate agents in London's Kensington and Chelsea say they can't meet demand for 1 million-1.5 million ($2.2 million-$3.4 million) homes. Wall Street's high-tech Nasdaq exchange has wheeled out its confetti machine for the first time since the credit crunch.

Everywhere the story is the same. Gold: at a record high, above US$1100 ($1476) an ounce. Shares: 50 per cent up since March. Oil: back to almost US$80 a barrel. Bonds: yields on two-year gilts (British government bonds) at a record low. Average British house prices: up 11,000 this year.

Around the world, asset prices are booming. Relief that the global economy has avoided the Armageddon feared in March, combined with large dollops of virtually free money, have helped put a smile back on the faces of the speculators. Too big a smile, according to some experts, since the buoyancy of asset markets is not reflected in the real economy.

Away from the frenzied financial world, among struggling firms and cash-strapped families, signs of recovery from the worst downturn since the 1930s have been much patchier. The US returned to growth in the third quarter, thanks to Washington's cash-for-clunkers scheme to encourage car sales, and tax breaks for first-time homebuyers. But unemployment is at its highest level since 1983 and the number of Americans losing their homes is still rocketing.

In Europe, the big economies of Germany and France returned to growth six months ago but consumer spending remains painfully weak. In Britain, the latest official figures show the economy still contracting in the autumn after six successive quarters of negative figures.

Mervyn King, Bank of England Governor, warned last week that Britain has "only just started on the road to recovery".

As share prices rocket, the question is: are policymakers trying to solve the problems caused by one of the biggest bubbles in history by pumping up another speculative frenzy?

This was what happened after dotcom shares collapsed in 2000, when former Federal Reserve Chairman Alan Greenspan slashed US interest rates to 1 per cent and left them there for three years, setting off the biggest housing boom in US history. And this time, central banks and finance ministries have added tax cuts, spending increases and "quantitative easing" - the creation of electronic money - and so created an even headier brew.

Ravi Batra, US economist and author of Greenspan's Fraud, says: "We are repeating the mistakes of Greenspan but on a much bigger scale. There is going to be another big pop in the new year."

He is not the only Cassandra. Nouriel Roubini, one of the few economists to see the crisis coming, warned this month that the US had replaced Japan as the centre of the global "carry trade" (whereby investors borrow money cheaply in a currency with low interest rates and buy risky assets that offer a return higher than the interest due on the loan).

With the US Federal Reserve pledging to keep interest rates only just above zero for "an extended period", Roubini says dollars, instead of yen, are now being used in "the mother of all carry trades", forcing up the price of all kinds of other assets.