Nath: I think speculation is necessary to "give BTC value" before much of a BTC-based economy is established. When more and more people start trading for BTC, prices will probably stabilize, especially if one can cover all his expenses in BTC.

Of course, as long as you need to exchange BTC for some state's currency to be able to buy goods with it, the value of a BTC will solely be bound to speculation.

Yours
David