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Strategies & Market Trends : The Stock Market Bubble

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To: Professor Dotcomm who wrote (3221)	6/6/2000 4:40:00 PM
From: Professor Dotcomm	Read Replies (1) of 3339

My dates were arbitrarily chosen from the beginning of the last half of the 19th century to the beginning of WW1. You are right, 1865 would have been a better starting point but also 1904 would have been a better end point. Why 1904? Because it heralded the start of the Great Kaffir Boom - the discovery of massive gold resources in South Africa. This sudden abundance of gold (and governments sticking to the gold standard), resulted in quite strong inflation from 1904 - 1914. This was because the gold miners had no problem selling the stuff as all the equivalents of central banks were buying all of it at guaranteed prices with the result that huge amounts of spending money came in without any major increases in productivity (unlike the Internet!). I dug out the original statistic from a 1966 publication by the Bank of England. The premise still held true even though its period ran from 1850 to 1965 thus including 25 years of the massive war induced (and then government induced) inflation from 1940 onwards

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