I am one of those individuals whom you have been told as of late to regard as the ultimate evil. I'm the jerk who is making your life harder and more expensive. If you could only get rid of me, all of your problems would be solved!
...only, not so much.
Here's a piece by John Stossel that was featured on the Atlasphere on this topic:
My favorite part:
McCain wonders “whether speculation has been going on.” He needn't wonder. Speculation always goes on. Speculation means to take a risk on what the future holds in hopes of making a profit.
This is what I wish people would learn about speculators, if nothing else. To make it even simpler, here ya go: to speculate is to place a bet on the future price of something.
That's it. That's what speculators do. They take an item - let's say... I dunno... oil?! - and they buy or sell contracts for delivery of oil at X price. They don't take physical possession of oil, they just make up contracts promising to deliver it.
Someone doing this can bid up the price of future oil and make money...
...or they can bid down the price of such contracts and make money.
So speculators can make money up or down. This sort of, kinda, maybe poses a problem for all of the people blaming the recent increases of the price of oil on speculators. Why? Simple: if they could run up the price all by themselves, why now? Why not earlier?
When the price of oil goes down, does that mean that speculators have had a sudden outbreak of altruism and charity?
Obviously, all of the blame that is presently spewed at speculators is nothing more than the latest scapegoat. It is meant to draw our attention away from the real issue: supply.
See... if we paid attention to supply issues, then we might notice that the Democrats have done everything in their power to keep us away from our own oil, thus creating an artificial shortage.
So back to the title of the post. I, too, am a speculator.
I speculate on currencies, particularly that the U.S. dollar will decline versus the New Turkish Lira. So I trade out Dollars for their exchange value in Lira at X point in time. All I do is trade one for another and hold the other while its value relative to the other changes, up or down. My trading them is not the cause of the change in value though, it's just a swap. National economies, national debt, internal and international events, these all determine the value of each currency relative to another.
But when the Dollar goes down it must be my fault anyway, right?
But what if the Dollar rises against the Turkish Lira? Is that my fault, too, or do I mysteriously fade away as an issue?
Did you know that if I speculate against the dollar and it rises, I lose money? How could that be if speculators are determining prices, why would we do that to ourselves?
Does it matter? When McCain or Obama say, "speculators are bad!", will you even remember my questions?
Dig deeper.
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