I'm not sure the term 'speculation' is accurate; a better term would be market manipulation.

When large amounts of liquidity pile into a relaitvely illiquid market that market can be pushed a long way; this isn't speculation. There was a lot of hedge fund money in the commodity markets last summer and the markets were jobbed. Of course, the CFTC looked around the outside pf the various buildings and reassured everyone that 'everything is fine!'

Both Martin Kindleberger and John Kenneth Galbraith described how this was done during the runup to the Great Depression;

http://www.amazon.com/Manias-Panics-Crashes-Financial-Investment/dp/0471...

http://www.amazon.com/Great-Crash-1929-Kenneth-Galbraith/dp/0395859999/r...

Back then it was confined to the stock market and the technique was called, 'Taking the stock in hand'. Rich investors would quietly buy stocks in a particular company then create media interest about that company and their interest in it. There were paid flacks who would specialize in 'highlighting' companies that were selected for manipulation. Once the public started rushing in, the big boys would quietly sell their positions letting the whole enterprise crash. Then, they would move on to another company's stock.

Confined markets can be manipulated, here is a good example:

Short sellers make VW the world's priciest firm
Tue Oct 28, 2008

By Sarah Marsh

FRANKFURT (Reuters) - Volkswagen (VOWG.DE) briefly became the world's biggest company by market value on Tuesday, as short sellers caught betting on a price drop with borrowed stock scrambled to find shares after a buying spree by Porsche.

http://www.reuters.com/article/ousiv/idUSTRE49R3I920081028

This was legal, but you can see how the process can work. The more things change, the more they remain the same ...