Those darn speculators again! But wait, where are they now?

Speculators are easy to pick on since they don’t seem to do anything except make money (funny, you never hear about those who lose money … but they do).

But wait, where are they now? Where did they go? Did they disappear waiting for the next round of high prices? Nope! They are still active in the futures markets doing what they have always done.

We don’t hear anything when speculators are driving prices down do we.

Indeed they have a useful function which is to reduce (not eliminate) price volatility. And those who perform this function well continue to provide benefits to all of us; while those who don’t perform well go out of business.

So here’s a series of blogs from Professor Perry that puts speculators in perspective again.

And another post that explains their role.

Onions can teach us something about “speculators.”

My prior take on this.

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  1. Don’t blame speculators | Better Financial Education Blog - June 19, 2012

    […] are easy to blame because the name implies greed. But many speculators lose money too and it is the balance between those who come out ahead and those who come out behind that help […]

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