Mr Khan said:
Commodities trading, derivatives, currency-speculation. I have nothing against investment per se, but there is a lot of stuff that is done with money that really shouldn't be, because it only benefits the wealthy. |
No offense... but this sounds more just like a lack of economic knowledge.
I mean... lets start with 3 big ways Commodities speculators help people whoa ren't rich.
1)Commodities Trading for example lessens the effects of shortages... giving people much more incentive to sell in times of shortages, and to conserve in times of abundance. This is really true in regards to durable commodities.
2)Additionally, Commodities traders provide great stability and liquditiy in the market. Without commodities traders it would only be the producers and consumers. Which means price variance in a market would be HUGE.
For example, say you have a Beef farmer and a Supermarket. What the Supermarket would pay for beef would vary RAPIDLY as the "Buy/Ask" numebrs would be very far apart and he wouldn't really have any idea what he woudl pay week to week month to month. Unlike now where prices stay relativly stable even with huge ups and downs. Supermarkets can price their beef pretty accordingly, and adjust prices gradually.
Without it, beef would either be very expensive always, or going up and down sporadically as supply went up and down sporadically. Since such a thing looks really bad and tends to hurt sales a lot and mess with knowing how much product you'll move.... people will go with option A.
3) Thirdly, speculation benefits farmers. Though granted mom and pop farmers are becoming less and less likely so your milegage for "helps people not rich" may vary on this one. Since farmers can sell there crops in advance to speculators. They don't have to worry about corn or soy or whatever dropping in value bankrupting them. They only have to worry about the price of the commodity when plantng it.
So no Mom and Pop farm that sells to a speculator has to worry that when they plant corn today, they'll go bankrupt tommorrow because corn prices are suddenly going to plummet months after they planted the crop with no way of them knowing previously.
They can always pick a crop that will maintain sustainability. (Assuming their crops stay ok anyway.)
Though there are less mom and pop farmers. They benefit more then factory farms... because factory farms never really fear being closed down because of a change in crops, and factory farms are big and broad enough that they can have many many different crops.
While your mom pop farms? Not so much.
