Jack TenneyExtra Point

by Jack Tenney, Publisher

September 2012

Albert Einstein was good about explaining relative speeds. You know: two trains traveling on parallel tracks and Johnny waves to Betsy from his train window to hers, and like that. The idea that there is an absolute speed (light) is held out like an unbreakable sports record: DiMaggio’s consecutive-game hitting streak, Ralph Boston’s broad jump, etc. But there’s always a chance, I guess, for something faster.

In recent years, the speed of money has been increasing to the point that there are real fears we’ll be forced to use something else to conduct our businesses.

Civilization has come a long way since bartering eggs for cheese on market day. Gold coins worked for a long time, but eventually, transaction sizes and urgency begged for faster, more convenient ways of handling, transferring, borrowing, valuing, saving, and even wasting wealth.

At this point in time, what is the speed of money?

With a good cell connection, you can watch the cost of your Happy Meal paid for with a swipe of your debit card hit your bank balance before you pick the pickle out of your burger.

If you had access to a super computer and an algorithm or two, you could out-trade a market maker, with the reward’s being 1/32 of a penny per share on a few million shares a day. Caution: You may want to test that program off-line for a day or two before launch or you could run up a $400,000,000 tab in a half hour swapping 100-share trades back and forth. Is that really what happened to Knight in early August?

Speculation on how time travel might work is based on the proposition that if an astronaut could travel through space fast enough he could return home before he left. That’s kind of how PayPal works: fast ... really fast. Your money is gone before you even spend it.