What does the fact that Apple is worth $2 trillion actually mean?

Apple shares shot up last week, valuing the company at Friday’s close at $2.1 trillion. With the quirky exception of Saudi Aramco – which is quoted but almost entirely owned by the Saudi Arabian government – Apple is the world’s first-ever two trillion dollar corporation.

So one American company, albeit a great global enterprise, is worth more than all the firms on the FT100 index. Or to take another benchmark, it is worth about 80 per cent of the UK national debt, which went though the £2 trillion point last month.

It is an astounding story, or rather two astounding stories. The first is the company itself; the second, what this says about US share valuations and the US economy in general. A quick word about Apple, then the (even) bigger picture.

As far as the company is concerned, it is of course very good. But more than general excellence, it has somehow managed to institutionalise the genius of Steve Jobs of being able to understand what people want before they know it themselves – and then creating a product or service that fulfils those desires. Many of us feared that once Jobs died that this quality would die with him. It hasn’t, or at least not yet.

So not only has it managed to create new iterations of its existing winning products, the iPhone at the pinnacle, it has also managed to create services that people greatly value as well. So Apple Pay is apparently growing four times as fast as PayPal. We will see what happens to the services division in the future, but it is growing so fast that in another decade or so Apple could be principally a service company rather than a product one.

The great challenge if you are number one is not just staying there, though that is hard enough, but being able to understand social change and put yourself on the right side of it. There are a host of examples of companies that failed to do so. Back in 2000 the US conglomerate General Electric (GE), then run by the famed Jack Welch, was the most valuable company in the world, worth nearly $500bn at its peak. It still does a lot of the things it did then, including making aircraft engines, but it has endured a truly tough two decades and is now worth £55bn.

Nor is the primacy of any commercial enterprise fragile. It is very hard to predict. Welch, who died earlier this year, was the great hero of US management, famed for his aggression and effectiveness. Many management books tried to capture his essence. His own books were best-sellers. To read them now, knowing what we know about what followed, is quite quaint.

Apple is, I think, much more secure than GE ever was. GE’s valuation was puffed up by clever publicity, which presented Welch as the symbol of American management excellence. The Apple valuation is a more circumspect analysis of the business’s prospects. However the GE story is relevant to high-tech America now.

In another 20 years’ time we will still need the products and services of Apple, Facebook, Google and the like, just as we still need aircraft engines. But the share value of these companies is saying more than that. It is saying that their global dominance will continue for another generation – that this is not a rerun of the dot-com boom, but something much more solid than that.

Opinion, as always in markets, is divided. What is hard to do is to separate the Apple/tech story from the macro-economic story about the world’s central banks flooding the world with liquidity and thereby driving up asset prices everywhere. The dominance of the world by high-tech west coast America is extraordinary.

Understandably that has led to opposition in Europe and elsewhere, and those pressures will have to be managed rather more carefully than they have to date. But if these companies manage to up their game and are more sensitive to social mood then US dominance will continue. With the partial exception of China, no one else is in the game.

But those valuations? They worry me. At some stage – we cannot know when – the money taps will be turned off. When they are, asset prices will fall, and the most highly priced assets are likely to fall further than most.