Get ready for gas prices to soar and $1,000 gold

In light of today’s spate of bad economic news, the Street’s guessing game is that the Fed will cut the disoount rate as much as three-quarter percent at its March 18 meeting or even sooner.

If that’s true, the Fed is clearly saying “we don’t give a damn about inflation,” or else, “we don’t have a fricking clue how to control inflation.”

In either case, a rate cuthack like that is guaranteed to fuel inflation. Even with a recession, I predict oil prices will hit $115/bbl and gold $1,000/ounce by Memorial Day.

Next economic bad news benchmark — $1,000 an ounce gold?

As the WSJ news pages point out, it hit $942 after the Fed’s second rate cut.

Yet more economic woes; $1,000 an ounce gold next?

Gold hits $900 an ounce; after oil broke the psychological barrier of $100/bbl, is $1,000 an ounce gold next?

Quite possibly:

“Concerns of a recession will keep pushing up gold prices,” Carlos Sanchez, a precious metals analyst at CPM Group in New York, said. “Depending upon what happens in the economy and in the Middle East, we could see gold testing $1,000 an ounce, maybe even this quarter.”

Consumer confidence, meanwhile, plunges again, to an all-time low:

According to the RBC Cash Index, confidence tumbled to a mark of 56.3 in early January. That compares with a reading of 65.9 in December — and a benchmark of 100 — and was the worst since the index began in 2002.

So, if Bernanke tries much more rate-cutting, gold WILL pop $1,000, and oil WILL threaten $110, even with a struggling economy.

As I have said recently, welcome to the world of stagflation.