If gold is not money, then we had better identify a viable hard-money alternative … and fast!

When asked by Rep. Ron Paul (R-Texas) Wednesday on Capitol Hill whether he thought gold was money, Federal Reserve Chairman Ben Bernanke appeared to need a few moments to think about it.

Finally, he responded: "No, it's not money. It's a precious metal."

Like Fred Astaire and Ginger Rogers, Paul and Bernanke reliably entertain audiences each time they come together on the screen to dance around each other's diametrically opposed perspectives on economic policy and theory. Their latest number continued:

Paul: "Even if it's been money for the past 6,000 years, somebody reversed that, eliminated that economic law?"

Bernanke: "Well, it's an asset. Would you say Treasury bills are money? I don't think they're money, either. They're a financial asset."

Paul: "Why do central banks hold it?"

Bernanke: "Well, it's a form of reserve."

Paul: "Why don't they hold diamonds?"

Bernanke: "Well, it's tradition, long-term tradition." [Paul laughs.]

Some may accept at face value Bernanke's bold declaration that gold is not money, but I've resolved to remain more circumspect toward the chairman's communications. Sometimes I even feel the need to offer a Foolish translation of his messages.

This is, after all, the same Ben Bernanke who offered the following during his confirmation hearing in 2005:

I believe that the tools available to the banking agencies, including the ability to require adequate capital and an effective bank receivership process, are sufficient to allow the agencies to minimize the systemic risks associated with large banks. Moreover, the agencies have made clear that no bank is too big too fail, so that bank management, shareholders, and uninsured debt holders understand that they will not escape the consequences of excessive risk-taking. In short, although vigilance is necessary, I believe the systemic risk inherent in the banking system is well managed and well controlled.

Sorry, Ben … you lost a chunk of credibility the moment that entire statement proved to be not just a little bit wrong, but completely and disastrously wrong-minded. And housing -- boy, was he ever wrong about housing!

Let's not forget that the nature of the position itself may make it difficult for the guy to level with the American people. Who can forget this telltale quote from former Federal Reserve Vice Chairman Alan Blinder: "The last duty of a central banker is to tell the public the truth." We already know that a veil of secrecy overlies the global gold market, so truth and transparency seem unlikely to flow freely on the topic.

So when Bernanke tries to convince you that gold is not money, I urge a healthy dose of skepticism. The Federal Reserve has a vested interest in preserving an image of resiliency within the very same fiat currency that carries the ultimate burden of its easy monetary policy: the U.S. dollar. An overwhelming 96% of respondents to a 2009 informal Foolish poll indicated that they view gold as money, and I, of course, am one of them. The idea that gold ceased to be money just because President Nixon closed the gold window in 1971 does not stand up to scrutiny, particularly when central banks around the globe continue to hold substantial quantities of gold bullion among their currency reserves.

I believe the past and future actions of the Federal Reserve under Bernanke are exceedingly likely to further a long-term devaluation of our currency to where one U.S. dollar will suffice for only 0.005 ounces of gold (at $2,000 per ounce). For a means to safeguard investment capital from that devaluation, the Sprott Physical Gold Trust (NYSE: PHYS) is one to trust for bullion exposure, though it's best to buy into relative weakness. For some higher-octane exposure, though, I continue to recommend high-quality gold miners, including my new top pick, Northgate Minerals (AMEX: NXG). Earnings results will be rolling out shortly, and I expect low-cost leaders Goldcorp (NYSE: GG) and Yamana Gold (NYSE: AUY) to shine. Peruse my recent review of "Top 10 Gold Stocks for New Money Now" for additional ideas, featuring Thompson Creek Metals (NYSE: TC), New Gold (AMEX: NGD), and rebounding phenom Brigus Gold (AMEX: BRD).

Although gold exposure can certainly present some wild swings in both directions, given the substantial uncertainty hovering over the outlooks for both the euro and the U.S. dollar, I find comfort in my own exposure to the one form of money that is not imperiled by this ongoing global currency crisis. Not only is gold clearly money, but through carefully vetted investment vehicles, participating Fools can make some money besides.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.