[friendzis]

> Speculators create pricing signals, help price things more effectively and create better liquidity.

Care to elaborate on the liquidity part? I fully agree that forex speculators play significant role in price (exchange rate in this case) discovery. Although, the money used for speculation is essentially locked up in the price discovery mechanism and if anything that reduces liquidity available to actual economy.

[jerguismi]

One speculator enters the market = one more buyer and seller. If you go to a stock exchange, you see the bids and asks. The more there is those, the better the liquidity. Each speculator adds either bids or asks or demand for them.