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Leesburg, Ohio | It may not be perfect, but it would most certainly be a "net bad for agriculture" without its existence.
Many talk of speculation and volatility being a bad thing. In fact, it is volatility that provides the best pricing opportunities...if the market had no volatility, all the profit would be permanently priced out of the market.
Pofarmer said speculators provide liquidity in the market, and he is correct.
The beautiful thing about the market is, it is essentially self correcting/self clearing. Without that ability, there would be major areas where commodities could not find a home at a price that made sense at all, or there would be no availability to meet local demands in some areas.
If you think those trading on the "Board of Trade" just arbitrarily set prices just to jerk you around as a producer and take advantage of you, nothing could be further from the truth!
As it is, the masses on both sides of the market are infinitely intelligent about setting the "correct" price at any given moment.
Eliminate speculation, and the market would be much more open to "manipulation". | |
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Is the board of trade a net good for agriculture?
