This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The End of Quantitative Easing and What It Means for Commodities

Stocks in this article: P NFLX F TWTR AMZN

NEW YORK (TheStreet) -- It's rather bizarre that we've heard so much from pundits and Republican policymakers about the horrors of quantitative easing, how we've needed to end the problem for too long, and now -- when we're less than three months from closing the program, nobody in Washington or on Wall Street is talking about it.

It's odd but true -- in the wake of such noise making, the debate has abruptly turned to interest rates

Certainly, interest rates are important. Still, how are we looking right past the end of quantitative easing without acknowledging that we're finally going to be done with printing money?

Coca-Cola Looks to Crowdfunding to Raise Social Media Awareness

Republican Calls for Dodd-Frank Changes Won't Rattle Investors

Washington Debauchery and the Fed Follies

Since 2008, we've basically had a printing press at the Federal Reserve. The most recent QE has pumped about $35 billion into the economy. There was supposed to be massive inflation due to this printing. The truth is, we had little to no inflation. In fact, it is quite likely that we will see a strengthening dollar. The dollar has been in a nice uptrend.

This leads us right into the end of a Fed buyback program that has basically printed $4 trillion without increasing inflation. Sure there are pockets of inflated prices such as crude, wheat, and even the price of tea in China, but it isn't true inflation. That's called anecdotal evidence.

What nobody is focusing on is the fact that it is very likely the U.S. dollar will start to gain ground on all other currencies. This will, in turn, hit all commodities. Every single commodity that is traded in U.S. dollars should slide in value. WTI crude could test $70-$80 per barrel based on our current supply numbers and the fact that geo-political unrest hasn't slowed global production in the slightest. Even Libyan oil is starting to come back to markets.

There is a chance that markets, overall, will be hit when this happens. Why? This is a bit unprecedented. We have never seen stimulus like this be taken off the table. You've heard the term "baked in?" There's very little evidence that the end of QE has been "baked in." Despite the headlines, we've been trading mostly sideways this year, but nobody knows how markets will react when the Kool-Aid is actually removed.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs