He's describing the euphoria that always accompanies a bubble atmosphere. In this case, it's a start-up bubble. The same exact atmosphere went on in the late 1990s, just with bigger rounds and fewer micro companies.

Money is sloshing around, and nobody wants to earn 2% on long term junk government paper.

$500,000 isn't what it used to be, literally, but it buys a lot in the way of a web start-up now. If that $500k is now really $250k in 1999 terms, it's buying more like $5 or 10 million in 1999 terms (when it comes to the infrastructure needed to get a web start-up off the ground).

I'd normally say the start-up bubble would continue until the next economic melt down dries up the funding, but the funding levels driving the start-up bubble are so low, it's hard to see what will slow it down short of government regulations (they're working on that).