what is hoarding 
hoarding is the purchase and warehousing 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 understanding hoardinghoarding 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 if several wealthy individuals start hoarding wheat the price will begin to increase middle class merchants will notice and then they might hold back wheat supplies in anticipation of future price increases that is enough to raise prices again panicked buying may create real shortages of wheat in some locations the poorest in some countries could even be at risk of starvation if the cycle continues beyond that point hoarding is sometimes blamed for shortages that are actually caused by price controls fixed exchange rates and other government policies illegal hoardinglaws are often passed against certain types of hoarding to prevent tragedies and reduce economic instability if a speculator intends to corner or otherwise monopolize a commodity then it may be considered an illegal act unfortunately for traders and regulators it is sometimes difficult to distinguish hoarding from unlawful attempts to manipulate the market owning more than 100 worth of gold bullion coins or certificates became a criminal act called hoarding in 1933 1 holding gold bullion became legal again in the u s in 1974 2hoarding vs investinghoarding is often considered harmful because it prevents commodities from being used in the rest of the economy investing can help firms to produce more commodities and other products legendary investor warren buffett said of gold it gets dug out of the ground in africa or someplace then we melt it down dig another hole bury it again and pay people to stand around guarding it it has no utility anyone watching from mars would be scratching their head in the long run investing in stocks has outperformed hoarding commodities that said there were years and decades when commodities had higher returns than stocks examples of hoarding in marketsone of the most famous cases of hoarding occurred in the silver market in the 1970s and 80s when the hunt brothers tried to hoard silver to corner the market nelson bunker hunt and william herbert hunt correctly predicted rising inflation but they used excessive leverage and were ill prepared when prices collapsed during the 1970s the hunt brothers purchased most of the physical silver inventory available on the market and later moved into futures contracts silver was less than two dollars per ounce when they started in the 70s by early 1980 the brothers managed to drive the price of silver to almost 50 per ounce at that point the hunts were no longer able to borrow the money they needed to keep buying silver and pushing up the price the hunt brothers eventually had to start selling and the ensuing panic caused the silver price to collapse in 1988 nelson bunker hunt and william herbert hunt declared bankruptcy yasuo hamanaka a commodities trader at sumitomo corporation became known as mr copper after he attempted to manipulate the copper price through hoarding he spent seven years in jail after more than ten years of unauthorized copper deals in the 1990s that led to more than 2 6 billion in losses 3at one point he hoarded as much as 5 of the world s total copper supply traders started calling him mr copper or the copper king 4hodl is a term derived from a misspelling of hold that refers to buy and hold strategies in the context of bitcoin and other cryptocurrencies it describes the hoarding behavior of cryptocurrency holders to accumulate and not sell or use in exchange because digital currencies like bitcoin are scarce and have a limited rate of new unit formation hoarding strategies increase the relative scarcity and can drive up the price 