This afternoon, the FOMC minutes were released to the public. The minutes are being interpreted by investors as a sign that another round of quantitative easing (bond buying) is around the corner. The SPDR Dow Jones Industrial Average (NYSEARCA:DIA) rallied higher after the news was released at 2:00 pm EST. Almost every institution who moves the stock market is rejoicing over the possibility of the easy money program.
Gold, silver, copper, oil and of course gasoline are all surging higher after this QE-3 chatter. Today, the United States Gasoline Fund (NYSEARCA:UGA) is trading at a new 52 week high at $59.50 a share. The last time the central bank implemented their last quantitative easing program called “QE-2” it caused energy and food prices to soar higher. Many people blame QE-2 in 2010 for the food riots in Egypt and Africa. Those nations use a large portion of their income on food and energy, unlike those who live in the West. If the Federal Reserve Bank acted on another quantitative easing program gasoline, oil, gold, and every other commodity would soar higher.
Some equities that took off to the upside after the FOMC minutes were the SPDR Gold Shares (NYSEARCA:GLD), ProShares Ultra Silver (ETF) (NYSEARCA:AGQ), iPath Dow Jones UBS Copper Total Return Sub-Index ETN (NYSEARCA:JJC), and the United States Oil Fund LP (ETF) (NYSEARCA:USO). Of course, the FOMC minutes that were released are coming from the August 1, 2012 meeting. Since that time, commodity prices have risen sharply higher and the Federal Reserve Bank will ultimately need to take that into consideration. Today, the average price for a gallon of gasoline at the pump in the United States is $3.72. It is unlikely that the U.S. consumer can handle much higher gasoline prices. Everyone should remember, U.S. consumer spending accounts for roughly 70.0 percent of the gross domestic product in the United States.