SPECULATING: AP and the Pope

Chris Mathews and Bill O’Reilly condemned speculators for driving up the price of commodities. Luckily everything they said was wrong. Unfortunately, now the Pope agrees with them. Boy, are we in trouble!

Speculators are gamblers betting on what will happen in the future and this has absolutely no effect on what is going to happen — none, zero — zilch!

Speculators simply lock in the prices and costs for the producers and consumers of everything from food to energy. In fact, true speculators always want the price of commodities to go down, not up! This is because, if they have a contract to sell something for say $50 a bushel and the price goes down to $45 — they can buy it for less and sell it for more.

This guarantees that wheat can be sold by the farmer before it even sprouts from the ground for a price that will let the farmer make enough of a profit to stay in business. He does not have to wonder if he’ll still own his farm come the harvest. Everything is bought and sold ahead of time so they know exactly how much they will be making. It takes out the guesswork by stabilizing expenses and profits.

It’s the speculators who have to wonder if they’ll win or lose — not the farmer, airline, utility company, trucking firm and us, when we enjoy amazingly stable prices for everything we need to live our lives. Think government-controlled Venezuela today with food riots in the streets!

STEVE NOVAK

Coeur d’Alene