LONDON (MarketWatch) ––Euphoria over bank bailouts and the temporarily buoyant stock markets is masking a sober reality.

The piper still has to be paid.

One fairly sanguine estimate of the cost of salvaging Wall Street came Tuesday morning from analysts at Merill Lynch. They figure the inflationary effect of all the bank bailout measures now underway will push gold to $1,500 an ounce and oil back to $150 a barrel.

The analysts don't offer a timeline, but the way markets have been jumping around lately it could be any day now.

Perhaps the real question is: why stop at $1,500?

All the world's governments have managed to do so far is to stop the bleeding from the credit crunch injuries that we actually know about.

There's still going to be a very nasty recession. And it will happen simultaneously in most of the developed world.

Given all that, $1,500 for gold looks more like a floor than a ceiling in the years to come.