Michael Burry linked to the following paper – Dying of Money: Lessons of the Great German and American Inflations. He is trying to make an analogy to present times with past times and some of it is reasonably convincing:
Stock market speculation, which adds nothing to the wealth of any nation, is the inflationary activity preeminent, and it was the craze of America in the 1960’s as it had been of Germany in 1921. A buoyantly rising stock market marks the opening stages of every monetary inflation. A sharply rising stock market proves to be an unfailing indicator of monetary inflation happening now, price inflation coming later, and a cheap boom probably occurring in the meantime. The stock market boom like the prosperity is founded on nothing but the inflation, and it collapses whenever the inflation stops either temporarily or permanently. American investment in the 1960’s, with its instant fortunes, its swamping volumes of turnover, and its absurdly high prices for incredibly useless ventures, underwent a species of insanity that was quite typical of inflationary booms. In 1968, the last year of full bloom of the inflationary prosperity, the volume of trading on registered stock exchanges alone was $200 billion, or more than four times what it had been in 1960. The income of the securities industry increased from $1.2 billion to $4 billion. The exchanges were compelled by the overwhelming volume of trading to close for part of the week, as the German Bourse had done in 1921. Capital gains of individuals reached $36 billion, more than three times the levels prior to 1962, and more than the income generated by the entire American gas and electric utility industry and agricultural industry combined.
There are many other damning paragraphs in this book worthy of note, but I will leave it at this.
OK so are you going to share you own opinion no the matter? Have you read it? I’m half way through it’s extremely enlightening.