Speculation has become a glamorous economic activity in today’s investment arena. Although there has always been some speculation involved in any economic activity- after all, you have to make educated guesses at potential profits and possible glitches in business as there never is any certainty in these matters- since of late a trend has emerged where the speculators practically run the show, sometimes with sheer manipulation, in international financial, commodity and stock markets. Those who do the real work in production, distribution etc. are rather left on the sidelines.
It is one thing to observe that the highest profits are flowing to these guys who are in a sense little better than gamblers. It is quite another to see that they never hesitate to manipulate anything for maximizing their spoils, with scant regard for the turmoil and disturbance their activities could cause in people’s lives and in the world at large, even when such consequences are sometimes quite distinct and visible. The current global economic crisis certainly has a lot to do with the unscrupulous dealings of there rapacious profit-mongers.
How else, for example, can one explain the record highs the real-estate prices attained in the US before the bubble burst. To be sure, the demand was high, but it is clear now that there was plenty of manipulation going on, fraudulantly issuing loans to marginally employed people and then marketing those loans to others in the form of investments. Didn’t those highly qualified financial whiz-kids know that it was unsustainable? Of course they did; they just didn’t care about the end-result and focused instead on their almost instant gains!
Another- probably more lucid- case in point was the way crude oil prices reached the stratosphere a few months ago, going beyond US$147 per barrel before they started to come down, ending up well below US$50 today. The reason given for the spectacular rise in those days was the ever-rising demand from China and India, which was in reality just a cover-up for the manipulation by speculators. The demand from China or India, though high and rising, never spiked all that much all of a sudden to cause such a spectacular price hike. Or if it really did, how come it evaporated so fast for the prices to fall by two-thirds in such a short period of time. A recent article in the Time Magazine gave a very good explanation of the whole episode and, fortunately for the world, the evil process has been halted for the moment. But nobody is being held accountable for the untold suffering it must have caused around the globe, especially in Third-World countries.
The greed of the speculators reaches criminal proportions when they show no remorse in driving up even food prices, thereby virtually starving the poorest of the poor in the world, who find it hard to make ends meet even with ordinary price levels. Those who always keep an eye out for a fast buck in the commodity markets need only the slightest reason to manipulate the so-called commodity futures to create huge gains for themselves, thus making the goods unaffordable to millions of people in poor countries. Whether these goods are essentials or not is of little interest to them.
We who live in a so-called civilized society have to find a way to put an end to this type of shameless activity sooner rather than later. This simply is the law of the jungle and doesn’t befit the advanced state of civilization we claim to have achieved.
Tags: criminal, manipulation, prices, speculation, unscrupulous
