The chairman of the Federal Reserve has an impossible job, and for accepting it, Mr. Bernanke must live with the consequences. Not to mention us New Yorkers, who know all too well the futility of price fixing (think rent control). Instead of rents, the Fed fixes an interest rate, the so-called federal funds rate. The market might set this rate; instead, the Fed imposes it, as on Tuesday, when Mr. Bernanke pushed the rate dramatically lower, to 3 1/2% from 4 1/4%.

What he said was that he acted to help the economy and to calm the credit waters. What else he might have been thinking, well, our Amity Shlaes took a crack at it Wednesday in “Bernanke’s Brain.” Or it could be something along these lines: “A credit crisis overlaid on a dollar sinking spell overlaid on a house-price slump overlaid on a cyclical business downturn overlaid on an inflation problem. Damned if I cut rates; damned — especially — if I don’t. Better cut.”

Wall Street had expected a rate reduction, but not until the meeting, regularly scheduled for next week, of the central banks’ policy-making committee. Instead, deliverance came in a flash, or panic. And deliverance is how investors interpreted this hasty intrusion. Nobody doesn’t like a bull market — we’re partial to one ourselves — and the U-turn in stock prices raised cheers from the beleaguered bulls.

Including the gold bulls. Last we looked, an ounce of bullion metal fetched $911 an ounce. Or, more expressively, the dollar had plummeted to 1/911th of an ounce of gold. If any price could wag a finger at the monetary establishment, it’s the gold price. Gold, though it flatters the neck or the ears, pays no interest. Unlike a profitable business, it generates no earnings. “The sterile peril,” its detractors call it, and as an investment asset, the yellow metal has much more frequently disappointed its fans than enriched them.

But in the 21st century gold has shone — which is to say that the dollar has not. And not only the dollar. Since the summer of 1999, gold has appreciated in value against every national monetary brand. It isn’t just the dollar that’s in a bear market. It’s the international monetary system. It’s paper money itself. Or, as these columns refer to the dollar and euro as a matter of policy, scrip. There is a bear market in scrip.

The talk around town is that ever since the mortgage troubles broke out in the open last summer, Messrs. Bernanke & Co. have followed the trend in interest rates, rather than leading it. Some will say that Mr. Bernanke is not so much imposing his will as validating the judgment of the market. The other side of the argument is that the market has been anticipating the all-too-familiar tendency of the American central bank to sacrifice the value of the dollar to crisis management.

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This kind of talk is dangerous for Mr. Bernanke’s legacy — the sense that the Fed itself, through repeated interventions, has elicited the kind of financial conduct that predictably ends in tears. Some people will overdo it no matter what monetary arrangements are in place. But the present system, or non-system, seems to bring out the inner Evel Knievel in many more investors, homeowners, and bankers than earlier systems did. We are thinking specifically of the golden years of the Bretton Woods system, which came a cropper in 1971. How sound was the dollar, defined by law as 1/35th of an ounce of gold. How prosperous was the economy. How dull (ordinarily) were the financial pages. “We have to do more of that,” Senator McCain was quoted as saying by our Peter Kiefer the other day when the candidate was asked about the Bernanke rate cut and the proposed Bush stimulus package. What we’d prefer more of is critical thinking in the Congress about a monetary system that not only manages to find trouble but actually seems to go out looking for it.