Of course you’re not going to have stability, but if we’re going to have instability, I say let it be because of real shifts in demand, NOT PERCEIVED SHIFTS. Speculators create artificial shifts in the demand curve (you got me back on theory, hope you’re happy) in an attempt to anticipate a real shift. This is a recipe for a mess - they will either make an error (anticipating a rightward shift when there is a leftward shift) or cause a rightward shift larger than real demand merits, all in the name of lining their pockets. They produce nothing via all this activity, they only flip bits in a bank account’s electronic register. You, I, and everyone else in America pay for this activity, to our detriment. Let the market work by responding to real demand.
“I say let it be because of real shifts in demand, NOT PERCEIVED SHIFTS”
But a shift in perceived demand IS a shift in real demand. Real speculative demand. Hardly matters to me that they’re moving pieces of digital information from place to place, or however it is people characterize it. The same rules apply as in all other markets.
Can’t imagine an economy in which all prices were based on the demand for people to use whatever it is they’re buying immediately. There has to be some place for people who buy in order to turn a profit. There’s a self-regulating mechanism to the process. When speculators make an error, they lose money. That’s the best motivator there is not to make errors.
As for not being productive, there are efficiency concerns. Hedging producers’ risks. Stimulating future production. And probably a hundred other things.
How does Southwest Airlines make you and "everyone else in America pay" when they try to hedge their future fuel costs?