(FORTUNE Magazine) – Treasury Secretary James A. Baker III surprised the meeting of the International Monetary Fund with a single word: gold. He announced a willingness to consider a new economic indicator that would reflect the prices of a basket of commodities, including the yellow stuff. Alan Greenspan, new chairman of the Federal Reserve (see cover story), approved Baker's speech in advance, and the Fed staff has been experimenting with a similar index. But the notion has some flaws. The Baker version is designed to give policymakers a jump on anticipating inflation. Whether it would depends on what commodities are included and how they are weighted. The proposed index is also touted as a way to help stabilize currencies. To do that, the finance ministers of the U.S., Germany, Japan, and other countries would have to cooperate, economically and politically, to an unprecedented degree. Is the goal of highly stable currencies at current rates worthwhile? Probably not. It is impossible to set the right exchange rates for the long term.