Harvey Jones, 0:00, Thursday 16 December 2010 It will soon be the shortest, darkest day of the year, and the economic mood is also pretty black. Everybody is fretting about the eurozone, inflation, sovereign debt, bond bubbles, trade war tensions, a China slowdown and whether their Amazon wishlist orders will make it through the snow for Christmas. There is a world of worry out there, which are the biggest threats to your portfolio? Inflation The Bank of England abandoned its 2% inflation target yonks ago, and the consumer price index (CPI (Berlin: CEJ.BE - news) ) has now hit 3.3%. Even this is a fiddle, because inflation is actually 4.7%, according to the old retail price index (RPI). VAT rises in January, while food and energy are getting pricier by the day. The Bank of England is in a bind. If it doesn't raise base rates soon, it will lose all credibility. If it does raise rates, companies and consumers will crash and burn. Inflation is an even bigger problem in China, Brazil and other emerging markets, and reckless money printing in the US won't help. Risk level: 7/10. How to play it: Abandon bonds, embrace commodities, food producers, oil companies and anybody with pricing power. The eurozone As I wrote recently, This Sucker This Going Down. Fellow Fool Owain Bennallack is more confident, claiming Death Will Not Part The Eurozone. But even if the single currency lives on, or rather limps on, 2011 will be a traumatic year. Italy and Spain have to roll over debt worth hundreds of millions of euros while juggling with credit warnings in front of a sceptical German audience. Expect markets to panic every time the eurozone circus rattles into town. Risk level: 8/10. How to play it: Gold. Emerging market companies and currencies. Buying good-quality European companies on the dips. Sovereign debt Briton's net debt is 56.3% of GDP, but coalition government attempts to cut spending have already sparked riots in the streets. The US has ignored its $13 trillion debts and dished out tax cuts to the wealthy, while those countries that have embraced austerity, such as Ireland (Berlin: IIK.BE - news) , find it only makes things worse. Debt servicing costs are rising, populations are ageing, the bond markets are running scared and the only question is which country will be first to default, ahem, restructure. Hang onto your AAA ratings, it's going to be a bumpy ride. Risk level: 9/10. How to play it: Gold. Youthful, debt-free emerging markets. Norwegian krone. Emerging markets The recovery has been built slowly, BRIC (news) by BRIC, but what if one of them comes tumbling down? Chinese inflation is at a 25-month high at 4.4%, while an apartment in Beijing now costs 22 times average earnings. QE2 is sailing full steam ahead into BRIC stock markets, ramping up asset bubbles and forcing central bankers to raise rates. Here's the most worrying signal of all: as we speak, every single IFA in the country is putting their clients into emerging markets funds. Risk level: 6/10. How to play it: Gold (again). Commodities (COMMODITIES.SN - news) -- if you can buy on the dips, and lock in for the long term. Dollar debauchment The world is having reservations about the global reserve currency, as the US Federal Reserve prints the dollar into debauchery. Stoking inflation to monetise the deficit may be the only way the US can ever tackle its debts, but it's a dangerous game. Especially since everybody is trying to debauch their own currencies at exactly the same time. Risk level: 7/10. How to play it: Gold. Commodities. Emerging markets and currencies. Bond bubble Bonds were supposed to represent a flight to safety, not route one to risk. As the US displays all the fiscal restraint of Elton John at a flowery headwear auction, yields on 10-year US Treasuries have rocketed from 2.4% to 3.2%. If inflation takes off as well, bonds will look even less appealing. And none of this will help corporate bonds. Risk level: 7/10. How to play it: Diversification. Equities. Consumer meltdown Unemployment has hit 2.5 million and rising. Despite almost two years of rock bottom base rates, consumers have scarcely made a dent in their £1.45 trillion of personal debt. House prices are set to fall, and repossessions rise. VAT is going up, so is energy. And that's just in the UK. The unemployment rate in the US is up to 17%, according to some measures, and house prices continue to fall. You don't want to be young and looking for work in Spain, or other afflicted Eurozone countries. Rising unemployment is generally bad news for shares, the only consolation is that it keeps a lid on inflationary wage pressures. Risk level: 5/10. How to play it: Shun consumer discretionary spending, just look how nightclub operator Luminar has been hit by rising unemployment rates. But people still have to eat. And that's not all Rising oil prices, Korean dictators, over-priced equities... what else is out there? Give your thoughts below.