It’s going to be illuminating to see what happens now that Chairman Bernanke has spared some words for the astonishing collapse of the currency he oversees. This happened in his remarks broadcast to a bankers’ conference Tuesday. Heretofore the Federal Reserve has left discussion about the dollar to the Treasury. Mr. Bernanke’s remarks have been interpreted by many as strong. By expressing a concern for the dollar, Mr. Bernanke indicated that the Fed’s monetary policy might break with recent tradition and bolster, rather than undermine, the strength of America’s greenback.

This was not lost on the markets. A source quoted by Reuters attributed gold’s brief dip below $880 an ounce — or, as we like to put it, the dollar’s rise in value to a bit more than an 880th of an ounce of gold — to Mr. Bernanke’s speech. The Associated Press noted that oil prices dropped sharply, below $124 a barrel, as a result of Mr. Bernkanke’s speech. When Mr. Bernanke was sworn in as chairman of the Federal Reserve board in February 2006, the dollar was worth a 568th of an ounce of gold and a barrel of oil was selling for approximately an 9th of an ounce of gold. Today a barrel fetches a 7th of an ounce of gold.

In other words, the chairman is past due to be worrying about the dollar, though he neglected to mention the role the Fed has played, either by omission or commission, in the dollar’s decline. Mr. Bernanke used a portion of his speech to discuss the housing bubble and the credit boom. But nowhere during this “longer-term perspective” did Mr. Bernanke admit the Fed’s own role in promoting these twin debacles. The loose monetary policies that the Fed implemented in the early part of this decade, which were intended to keep the economy out of a recession, fueled both the sources of turmoil that Mr. Bernanke described.

It was toward the end of his remarks that Mr. Bernanke expressed concerns about the dollar and the dangers of inflation. “The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation,” Mr. Bernanke said. The chairman also stressed the risk that high inflation rates, if sustained, “might lead the public to expect higher long-term inflation rates, an expectation that could be self-confirming.”

No doubt, particularly since the dollar has no legally defined value. Mr. Bernanke singled out sharply rising commodity prices as the main source of the dollar’s decline, but that’s like saying that wetness is the cause of rain. Gold tells us that the cause of the rising commodity prices is the collapse of the dollar’s value. In other words, monetary policy, not the circumstances that chronically thwart it, is the trouble with our languishing greenback. Would that Milton Friedman were alive to remind Mr. Bernanke that inflation is always a monetary phenomenon.

If that sounds harsh, we don’t mind saying that we recognize that Mr. Bernanke does a job defined for him by the Congress. According to the mandate set by the Congress, the Fed must maintain the stability of the dollar and promote maximum employment, which effectively means protecting the economy from the full plunge of a cyclical recession. Since the dollar has no legally defined value, this inevitably involves a choice between the first mandate and the second. Repeatedly, the Fed has chosen, and the money supply grows as the value of the dollar shrinks. As the recent financial turmoil demonstrates, it is a dangerous trade-off.

“Our goal,” Mr. Bernanke said in concluding his remarks this week in Spain, “is to emerge from this difficult period with a financial system that will be more stable without being less innovative, with a more effective balance between market discipline and regulation.” If that means that the dollar is going to be managed in a way in which we don’t see its gold value plunge the way we have in the past few years, it would represent a historic step in the right direction.