As the price of gold pushes toward $550 an ounce, Wall Street asks, “Why?” We would ask, “Why not?” The dollar is a piece of paper of no intrinsic value. It costs next to nothing to produce. It is ubiquitous, especially in the vaults of America’s Asian creditors. Gold is costly to produce and hard to find – easy on the eyes, too. In the day, gold was money itself. It was the collateral behind the paper. If you didn’t trust the dollar – or the pound, the yen or the various European currencies now rolled up into the euro – you could exchange the paper for the specified, lawful weight of bullion.

The full-strength gold standard died in World War I. An eviscerated gold-based monetary system was instituted in the 1920s. A still less rigorous regime was set in place at the end of World War II. And this second pale shadow of the real McCoy – it was called Bretton Woods – ended with President Nixon’s 1971 decision to sever the final connection between gold and the dollar. At the time, an ounce of gold was the equivalent of $35. A great inflation followed.

As a monetary asset, gold is unsurpassed. You can conjure up all the dollars you want, if you happen to be the American government, but gold occurs in the earth in only three to five parts per billion. Once found and mined, it is indestructible. The world’s supply of gold therefore grows slowly but steadily. A given year’s output (or shortfall in output) makes no great difference in the size of the global hoard.

In two weeks, Ben S. Bernanke is expected to relieve Alan Greenspan at the helm of the Federal Reserve. Mr. Bernanke, a former Princeton economics professor with a weakness for the vivid heuristic metaphor, once incautiously boasted that the Fed could, if it wanted, drop dollar bills out of helicopter doors. This was in 2002, when the Fed, of which Mr. Bernanke was then a governor, was on a campaign to prop up the rate of inflation. “Deflation” was monetary enemy No. 1, or so said the central bank.

“Like gold, U.S. dollars have value only to the extent they are strictly limited in supply,” said Mr. Bernanke in the heat of this campaign to whip deflation, of which there was none. “But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. . . . We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

Gold, though beautiful to behold, pays no interest. Then, again, interest rates the world over are the lowest they have been in generations. In Japan, they are virtually zero. Dollars yield more than euros – on money market deposits, 4% rather than 2% – but the yield is not so much higher than the rate of inflation. By choosing to buy gold, a saver pays no great penalty in foregone interest income.

Nowadays, the dollar is faith-based. So is every other national currency. All owe their value to the words “legal tender,” or their non-English equivalent, and to the people’s confidence in the judgment and probity of the men and women whose hands crank the printing press, or tap the computer keys. No doubt, Mr. Bernanke means to do well by his country. But he has made it plain that he will not countenance a rate of inflation too close to the zero mark. The dollar, he has said, should depreciate by 2% or 3% a year, no more and no less.

We are not sure which part of the chairman-in-waiting’s prescription is more concerning: his expressed belief in the necessity of debasement of the currency or his cool confidence that the Fed can exactly bring it about. Central bankers are not seers, not miracle workers. They are government employees. Why, then, is the gold price going up? We’d be surprised if it weren’t.