The Federal Reserve may not be the central bank of the world, but it sure produces results like it is from time to time. It seems like everything the Fed does for the U.S. gets blown up in the rest of the world.

Even when it doesn't intend to function as the central bank for the world, it can really change things in other countries. Take Brazil, for example.

Gene Frieda writes in the Financial Times about the domestic credit boom in Brazil that took place in recent years: "Thanks to vast capital inflows, real interest rates collapsed from an average of 12 percent between 2001-07 to 5 percent in the post-crisis period. Private credit duly surged from 50 percent of gross domestic product in 2007 to 83 percent at its peak in 2015."

Commodity prices were booming, and the Chinese made Brazil "the pre-eminent beneficiary" of its rise in the world. Things could not have been much better for Brazilians.

The Federal Reserve System underwrote a large proportion of this rise as it protected against a possible decline in prices in the early 2000s and kept U.S. short-term interest rates quite low.

A lot of the money from this effort flowed into emerging nations, especially into those supplying the world with commodities.

As the Federal Reserve engaged in three rounds of quantitative easing after the Great Recession ended in June 2009, more and more money flowed into the rest of the world,  and this fueled the continued inflation of commodity prices leading some analysts to claim that there was a credit bubble in commodity markets during this time.

Brazil boomed.

The quantitative easing of the Federal Reserve came to an end in October 2014.

As the Fed was winding down the last round of quantitative easing, traders realized that the program was really going to end, and commodity prices peaked in June 2014, with the S&P GSCI peaking around 670 at the end of that month. By the end of October 2014, this index was down to around 540.

The boom in Brazil started unraveling. Capital started leaving the country. In June 2014, the Brazilian stock market index, the Bovespa, was around 57,000. By the end of October 2014, the market had dropped to around 54,000.

The Brazilian currency, the real, was around 2.26 per dollar in June 2014. By the end of October 2014, just after the presidential election, the value was 2.52 per dollar.

As the year 2015 progressed, the emerging markets, and particularly Brazil, were hit by the threat that the Federal Reserve was going to begin raising its short-term interest rate target. First, it appeared as if the rise was going to take place in June, which didn't happen, and then in September, which also didn't happen.

With the fear of such a rise happening, the commodity markets continued to tank as the S&P GSCI fell to around 335 at the end of August as expectations for the rate rise continued. The value of the Bovespa dropped to around 45,000 in September, and the value of the real continued to fall, reaching 4.17 per dollar in that month.

Elaine Moore, in the Financial Times, writes about how the Fed's failure to raise its policy rate in September and the expectation that it will not raise the rate any time soon has benefited the emerging markets, and Brazil.

The Bovespa leveled off in October and remains above 44,000. Moore writes, "So far this month the MSCI index of emerging market equities is up 9.25 percent while emerging market equity funds tracked by EPFR Global have just recorded their first positive weekly inflows since June."

The value of the real has stabilized and even risen a small amount as it currently takes about 3.90 real to acquire one dollar.

All of this shows just how big an impact Federal Reserve policy has around the world. The dollar is, by far, the most important currency in the world, and with the free flow of capital around the globe it seems that when the Fed sneezes, the rest of the world catches a cold.

The Fed's power has reached such a level that it must begin to give greater consideration to how its actions impact the rest of the world. In effect, its goals and objectives must be modified.

This will not be an easy task, however, because the goals and objectives of the Federal Reserve are set by the U.S. Congress.

If the Fed's goals and objectives don't change, then this should have some impact on how the smart money invests.

As we have seen during the Fed's three rounds of quantitative easing, if you are investing within the U.S., "don't fight the Fed." That is, accept what the Fed is doing and go with the flow.

If you are investing outside the U.S., you bet along with the Fed, but you expect greater volatility. In the case of Brazil, when the Fed was easing, Brazil boomed, its stock market rose dramatically, and its currency got a lot stronger.

When the Fed stopped easing, the Brazilian economy slowed, the Brazilian stock market plunged, and the value of the real collapsed.

When the Federal Reserve eases, capital flows all over the world. When the Fed ceases to ease, the flow of capital is reversed.

Given the current institutional arrangements, it seems as if the smart money in the U.S.  and elsewhere can make a lot of profits on bets like these.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.