By INDYKIDS STAFF
How speculation works: Say a person with a lot of money goes to the supermarket and buys 1,000 boxes of corn flakes for $4 each on “contract” from the store manager. This person, a trader, is not buying the cereal to eat; he is hoping to sell it back at a higher price.
Because there is less cereal on the market, the store manager raises the prices. Soon, the price of a box of corn flakes is $10 and the trader sells his contract back and pockets the difference of $6 a box.
This is called speculation; it’s like gambling. This is what is happening all over the world. Traders and banks with lots of money are buying up contracts on all sorts of basic items — milk, pork, gold, oil, aluminum and more — hoping to make money. But this is taking food off the dinner table for millions of families. While a few rich people can get even richer, it means other people must go hungry or even starve.