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First of all, let me start out with a quick introduction about who the heck is Ben Bernanke.

Benjamin Shalom Bernanke has been the head of the Federal Reserve since 2006. Unfortunately for him, his post coincided with the ‘Great Recession.’

Over the past couple of years, it has been his job to clean up this mess and I’d say he’s done a relatively good job. Heck, he was Time Magazine’s Person of the Year in 2009! Even I have never gotten that honor!

Right now, however, his term is coming to an end and it’s up to the Senate to decide whether he will be granted another four-year term or not.

If you asked me a couple of weeks ago whether he would be reappointed, I would have said that it was almost a sure thing. But as my pal Pip Diddy pointed out in his roundup today, things aren’t as promising as they used to be for Mr. Bernanke.

You see, unless the Senate comes up with the 60 votes to keep him in place, Big Ben’s reign could come to an abrupt end. Although he is still widely expected to have another four-year term, more and more Democrats are withdrawing their support for the incumbent Fed Chairman.

Word on the grapevine is that Bernanke now has more than ten senators who would vote against him. If Big Ben doesn’t receive the number of votes needed to secure his stay in office, the Senate could pull off an NBC and kick Bernanke off his prime time spot!

Still, many of Bernanke’s supporters point that his moves as Fed Chairman was what helped the US economy avoid an even greater recession. Early in his career, Bernanke studied extensively and wrote about the main cause of the Great Depression.

In his thesis, he explained that the financial famine during the 1930’s was particularly enhanced by the Fed’s indecision to expand the money supply. Come 2008, this theory was then put into action.

In an effort to avoid Great Depression 2.0, Bernanke and his crew lowered interest rates to an all-time low of 0.25% and injected massive amounts of money in the system through various quantitative easing measures.

While the US and the rest of the world still fell into recession, some argue that his aggressive policies helped steer away the economy from equaling its first major downfall. Given his experience over the last couple of years, he is perhaps the most capable person to lead the Fed.

In my humble opinion, the upcoming confirmation is an issue between continuity and uncertainty more than anything else. In the event that Big Ben does get reappointed, things will remain status quo, allowing whatever his grand master plan is to bloom in full.

Currency traders and investors alike have gotten to know how Bernanke does things, from injecting billions of dollars into the economy to cutting interest rates to practically zero.

On the flip side, a new Fed chairman could produce a wave of uncertainty, especially during this time of economic recovery.

A new Fed head means a new set of guiding principles, leading to a smorgasbord of questions… Will the new Fed head be as aggressive as Ben? Will future inflation be his concern? Or will he be more concerned with the ongoing economic recovery? Ahh, so many questions, so little space to write on!

As for the effect on the dollar… Well, it would be an understatement to say it’s a tough call but let me go out on a limb and say that, given the uncertainty surrounding the issue, the upcoming decision could cause the usual risk appetite-aversion to come crashing back in the market.

With that said, hopefully I can get my limbs back intact when the smoke clears!