The point is not that I see it as some political issue, I don't. Its that I see it as being mostly false, rather than mostly true (and issue like this is unlikely to be entirely true or false, its not like speculators where the only force involved in the increase or that they had no effect on prices at all).
If you are correct (and even though I don't think you are, I don't dismiss the idea completely) you fail to make a solid argument for your position, so you don't give me any reason to change mine. I think part of the problem is that its so obvious to you, that you have a problem making an argument for people who look at it and don't see anything obvious about the idea. Of course I also think part of the problem is that your wrong, but even if your not, I think the previous point still applies.
The two firms were breaking this rule and risking fines or worse
That might be true. It might be important. But it isn't relevant to the point that we are discussing. It doesn't logically address the issue at hand.
The word "speculator" doesn't imply evil or nefarious intent on their part.
Agreed.
But when the price of a physical commodity runs up, it can have eggregious effects.
Agreed. But again it doesn't directly address the issue. Its a statement about what can happen because of price increases, not what caused a particular price increase.
Edit - As for ICE and other contracts, that weakens my counterargument about speculators mostly betting in the other direction, but it doesn't add a direct argument for your position. Since we don't know what happened with ICE, we can't know which way the overall net betting was.
And I've never really seen you address my earlier point. -
When a speculator guesses that supply will tighten up in the future, and they are right, they help increase the price now, which helps provide the incentive for people to adjust before there is much lower future supply, and also helps smooth out the price because the jump starts earlier.
When they are wrong they lose money, and have reduced ability to make speculative bets in the future. (Yes its a bit more complex than this since many traders trade other people's money but the general idea still holds)
When they are right they provide a service. When they are wrong their impact is smaller (both because they use up money, and because they are going against the fundamental forces moving the market). And either way along the way they increase liquidity. |
