NEW YORK (CNN/Money) - Gold's recent rise to $420 an ounce can only mean one thing: Investors are very, very afraid right now.

At least that's what the glittery stuff's rise from $350 an ounce a year ago to its highest level in 15 years means to the Federal Reserve. In a speech given over the weekend Fed governor (and favored mouthpiece) Ben Bernanke said heightened geopolitical tensions since 2001 "can account for the bulk of the recent increase in the real price of gold."

Oddly, those heightened tensions don't appear to be having the same sort of effect in other markets. Last year's 50 percent rise in the Nasdaq and big rally in high-yield corporate debt don't speak to a lot of fear and trembling among investors.

Bernanke allowed that the dollar, which has dropped around 15.6 percent against the United States' major trading partner currencies over the past year, was also a factor in gold's rise.

And worries about inflation? That has nothing to do with what's going on, according to Bernanke.

According to other observers, Bernanke's speaking nonsense. Gold is rising, they say, because the Fed is vigorously fanning the embers of inflation, and investors are betting it will succeed in getting a blaze going.

The gold bugs, who always bet that gold would snap back, were right in the end, wrote Pimco managing director Paul McCulley in a recent note -- even if many of them were unable to stay solvent long enough to see their bets pay off. Faced with mounting debts, countries cannot resist the urge to print money, lowering the value of their currency and making it easier to pay those debts off.

This is true not just for the United States, but for other countries. Since everybody's currency can't fall in value against everybody else's currency, all the currencies fall in value against stuff. In other words, the prices of various things go up.

In this environment, gold is a storehouse of value. And so it rises.

What was different over the past two decades, at least until recently, is that policymakers around the world, led by the Federal Reserve, got on the inflation-fighting wagon. And they did such a good job getting inflation down that they began to worry that deflation might come knocking.

"The gold bugs missed that," wrote McCulley. "But they were not wrong, even though most of them went broke. In the end, fiat currency regimes are inflationist. Soaring gold over the last year has coincided with the Fed's open acknowledgement that it has fallen off the disinflation wagon, not because it could not help itself, but because it had no choice."

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The Fed is dragging other countries into the game, thinks Northern Trust chief U.S. economist Paul Kasriel. Asian economies, for instance, are trying mightily to keep their currencies steady against the dollar, and to do that they are busy printing out yen and baht and what-have-you. And many economists now believe that the surge in the euro may prompt the European Central Bank to cut rates.

"Markets are sensing, quite rightly, that reflation is the policy objective," said Kasriel. "Gold should do well until central banks decide they want to put a stop to this."