[QUOTE]Quote from omegapoint:
Somebody explain to me where the profit comes from if not from the bagholders? Nothing new is created or am I missing something? Aren't you just substituting one potential purchaser for another for a net unchanged economic stimulus?
I'd be happy to.
For an economy to work efficiently, there needs to be price signals. Price signals allow for capital to be allocated to it's most productive uses. That's one thing speculators do. Provide price signals. If Obama and his team try to tell us where capital should be allocated, we are in for an implosion.
The other thing specs do is provide liquidity so that when price signals give the signal that capital should be moved to a more productive source, it can easily be done. Liquidity is there to do it.
Hope that helps, but I've read some of your posts in p and r, so I know that you will never be convinced.