The anemic US economic recovery has led central banks in developing nations to ease their monetary policies. These moves have painted the US Federal Reserve into a corner.

According to recent Commerce Department data, US gross domestic product (GDP) growth faltered badly in the first half of the year. Initial data found that the US economy expanded by 1.9 percent in the first quarter, but that number was slashed by 0.4 percent in the most recent report. The second-quarter figure of 1.3 percent annualized growth is also likely to be revised as more data becomes available.

A number of factors contribute to the country’s economic weakness, but a battered US consumer lies at the heart of America’s sluggish economic growth. Consumer spending represents about 70 percent of US economic activity, and spending ticked up by a mere 0.1 percent in the second quarter. Consumer spending in June fell for the first time in two years as wages declined and the savings rate rose to 5.4 percent. The outlook for consumer spending remains dicey; a number of high-profile mass layoffs have been announced in recent months.

Such anemic economic growth can’t make a dent in the US’ unemployment rate of 9.2 percent, especially as new workers enter the labor market each year. Economists estimate that even if the US achieved annual GDP growth of 3.5 percent, it would still take five years for the unemployment rate to reach pre-recession levels.

The sputtering economic recovery has left Federal reserve Chairman Ben Bernanke and his colleagues on the Fed’s Board of Governors in a bind. The minutes from the June meeting of the Federal Open Market committee reveal that the committee discussed adjusting US monetary policy if unemployment and economic conditions further deteriorated. In essence, they were talking about another round of quantitative easing.

By most measures, the economy has deteriorated since the meeting in June. Furthermore, a survey of money managers conducted in July by Bank of America Merrill Lynch found that nearly all of the respondents expected a third round of quantitative easing (QE3)

The market has already anticipated a fresh round of money printing and global central banks have begun moving down that path. In early august, the Bank of Japan intervened to prop up a weakening yen; the Swiss National Bank reduced interest rates to temper the rapid appreciation of the country’s currency, the franc; and the European Central Bank began purchasing bonds in the market. These moves mean it’s quite likely that QE3 will commence by the end of the year.

Given the slow pace of economic growth in 2011, economists and pundits continue to debate whether the first tow rounds of quantitative easing actually had the desired effect. The current slow down in growth has been blamed on higher commodity costs, which many argue are a result of quantitative easing. There’s some evidence to support this conclusion; since the announcement of QE2 in August 2010, the broad CRB Commodities Index jumped by almost 30 percent and crude oil prices gained more than 50 percent.

The aim of quantitative easing is to revalue assets. But the liquidity that’s created as a result of massive government bond-buying programs has a tendency to chase the highest returns; as of late the highest returns are found in commodities and emerging markets. Additionally, many nations still peg their local currencies to the US dollar. These countries inevitably feel the effects of quantitative easing in the form of a weakened greenback, prompting global central banks to tighten interest rates. The process creates a feedback loop that only further hinders economic growth.

Supporters of quantitative easing argue that the additional liquidity created by the program drives bank lending. It’s a theoretically sound argument; cheap capital allows banks to achieve higher profits from lending activity. But there’s simply not much demand for loans at present and bankers have consistently reported weak loan demand from creditworthy borrowers.

With these contradictory signals, it’s difficult to assess whether a new round of quantitative easing will actually boost the economy. But it’s certain to drive up inflation, which is a scenario we know how to play.

Commodity prices will be a prime beneficiary of quantitative easing and iPath Dow Jones-UBS Commodity Index Total Return ETN (NYSE: DJP) is an excellent broad-based index for gaining exposure to this asset class. The exchange-traded note (ETN) tracks a basket of hard and soft commodities as well as crude and natural gas. There are some risks inherent in the ETN’s structure—it’s basically an unsecured debt agreement—but iPath Dow Jones-UBS Commodity Index Total Return ETN is a tax-efficient offering because it doesn’t use futures or other derivatives to build its commodity exposure. Futures-based exchange-traded products have a tendency to make short-term capital gains distributions triggered by contract rollovers.

WisdomTree Dreyfus Commodity Currency (NYSE: CCX) allows investors to benefit from rising commodity prices and reduce exposure to the US dollar. As commodity prices rise, the valuations for the currencies of commodity-producing nations appreciate against the dollar. These currencies serve as a hedge against inflation and also exhibit little correlation to stocks and bonds.

The fund tracks a basket of currencies of commodity-producing countries and divides its exposure between developed and emerging-market nations. The fund’s portfolio includes investment in the currencies of Australia, Norway, Canada and Brazil.

WisdomTree Dreyfus Commodity Currency sports a reasonable 0.55 percent annual expense ratio. However this fund relies on currency futures and swaps, which can result in an unexpected tax bill.