Subject: Re: The good old days ...
The first one isn't, really.

I don't think this is correct. Let us assume the following to simplify the analysis. Let assume Bershire balance sheet has no liabilities other than equity & float, no debt. Float = 50% of equity. Furthermore, float is invested in short term T-bills only. Let us also assume that ST rates are 0.5% above inflation and LT rates are 2.0% above short term rates, and equity risk premium = 3.0%. Let us assume taxes are 0.

Case 1: Inflation = 0.5%, ST rate = 1.0%, LT rate = 3.0%. Return on equity = 3.0+3.0+0.5*1.0 = 6.5% nominal or, 6% real.
Case 2: Inflation = 2.5%, ST rate = 3.0%, LT rate = 5.0%, Return on equity = 5.0+3.0+0.5*3.0 = 9.5% nominal or, 7% real.

SO it does appear that Berkshire would better off in a higher inflationary, higher rate environment due to leverage from float.