This
statement (that it is not possible for everyone to believe the price will go up) is not true in
all cases.
For example, it is perfectly possible for everyone to believe that
the price of gasoline will be higher in the summer once it is driving season in the United
States. We know this will happen but it does not cause enough changes in behavior (less
driving, more production) to prevent the price increase.
The statement is,
however, more accurate when it comes to the futures market for commodities. Many people who
trade on the futures market are speculators. They are essentially looking to bet on whether the
price of a given commodity will go up or down. If all speculators were to agree that the price
would go up (and if they were all to agree on how much it would go up) much less trading would
occur. This is because there must be both supply and demand for trading to occur. On each
futures contract made for speculative purposes, one side must think the price will go up more
than the other side does. If both sides agree on how much the price will go up, neither would
make the trade. It is like trying to bet on a sports event with a friend if you both think the
same team will win by the same margin; neither of you will take the others
bet.
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