I’ve read through all these and I have a theory. Perhaps the best way to understand speculators is with 4x4 trucks on Ebay. There is a market of buyers and sellers which is fairly steady over the long haul. In the fall, prices go up and down in the spring. A speculator will buy in the spring and hold it until the fall to sell it again. The speculator will cause prices to rise in the spring when the prices are low, and cause them to drop in the fall. Overall, the speculator will contribute to equalizing the market and the average will remain about the same. So speculators actually flatten the market for the most part. When it works, speculators contribute to lower prices when market forces are on the high end and higher prices when market forces are on the low end.
The exception to this is when too many speculators get into the market and drive up prices. They can actually cause an opposite reaction and create even higher prices in the fall but there will always be a corresponding dropoff when the market is oversold. Am I close?
Yes.
Yes, but it should be noted that although such a run-up may shift more money from the pockets of consumers into those of a few speculators, that amount of money will generally be smaller than the amount lost by speculators who mistimed the market. Indeed, once the bubble starts to appear, it's inevitable that a fair chunk of money will be lost by speculators who mistime the market. The only thing market timing will affect is which speculators lose money.