Question

Write a short note on Hoarding.

Answer 1

Hoarding is the purchase of large quantities of a commodity by a speculator with the intent of benefiting from future price increases. The term hoarding is most frequently applied to buying commodities, especially gold.

However, hoarding is sometimes used in other economic contexts. For example, political leaders might complain that speculators are hoarding dollars during a currency crisis.

Hoarding is commonly criticized for creating shortages of goods in the real economy. It is possible for hoarding to create a cycle of speculation, self-fulfilling prophecies, and inflation.

Hoarding is sometimes blamed for shortages that are actually caused by price controls, fixed exchange rates, and other government policies.