Cash and Supercash
BEFORE our eyes and ears just now is a superb example of what Smith called super- money. This is a currency printed in the stock market when times are good and enabling its possessors to do almost any- thing. Armed with it, WorldCom trumped British Telecom, which was trying to buy its way into America by paying $22 billion for MCI. WorldCom can offer $30 billion: in supermoney, that is. Its shares are so highly valued that they can be used as currency in deals, which helps to make the deals look good, which helps to keep the share price up. . . In this way a little company with big ideas, which WorldCom was, can parlay itself into the first division. Supermoney, Smith said, was like any other money: when the supply expands too fast, that means trouble. Just now Wall Street is papered with it — hence the 'irrational exuberance' that was troubling Alan Greenspan of the Federal Reserve when prices were 10 per cent lower. Warning: no currency can lose its value more completely.
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