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Source link: http://archive.mises.org/16456/guerrilla-hoarding/

Guerrilla Hoarding

April 12, 2011 by

In common usage, anyone who stores more of a good than their neighbors do is often viewed as a “hoarder.” A common example of hoarding is stocking up on durable grocery items. Historically, governments have frowned upon hoarding. What’s good for us is bad for them.

FULL ARTICLE by Wendy McElroy

{ 28 comments }

greg April 12, 2011 at 9:29 am

I have nothing against hoarding, that is basically smart shopping. You are buying something today at a good price which you will use in the future. The problem I have is when you buy an item today that you never plan to take delivery, like buying future contracts. This does have an effect on prices. As one trader on CNBC said, the price of oil has nothing to do with the supply and demand of oil, it has everything to do with the supply and demand for paper contracts. And with the expanded markets that these paper contracts are traded, prices can make major moves. Furthermore you can control these contracts with a fraction of the underlying commodity cost to increase the price leverage.

Prices we pay are affected by these future contracts. Hoarding or selling of these contracts are reflected in the price we pay at the retail level.

David C April 12, 2011 at 11:02 am

I don’t believe that playing futures contracts really works unless you have real shortage in the future, or unless the money supply expands in the future. Unfortunately, the latter seems to happen a lot more often than the former. Either way though, the futures contracts are performing a useful function. Driving up the price of a limited supply to keep it from running out, or protecting a persons money from inflation.

IMHO, there is a problem with naked shorts though. When people sell things they don’t have, it works out OK if they settle, but can open the door to a lot of fraud. I think a normal market would develop checks and balances to this sort of thing, but think that the market we have today is too distorted for that.

B.K. Marcus April 12, 2011 at 11:39 am

David C, I suspect you have already read “Short-Sale Restrictions Are an Exercise in Naked Power” (August 11, 2008) by Robert P. Murphy.

B.K. Marcus April 12, 2011 at 11:34 am

greg, you may want to consult “The Social Function of Futures Markets” (November 29, 2006) by Robert P. Murphy.

Cris Crawford April 12, 2011 at 9:34 am

I am about to start hoarding incandescent light bulbs, as soon as I do an inventory and find a good supplier. However I do have a relative whose home contains several rooms and a garage that cannot be entered because they are full of useless items and trash. There is a problematic aspect to this behavior when it is compulsive and driven by irrational motivations. To equate your opening definition with the pathological behavior that is referred to by the television show is provocative, but I think it clouds the issue somewhat when the same word is being used to refer to two different behaviors.

MB April 12, 2011 at 10:22 am

There is hoarding and then there is hoarding.

Those tv shows focus on the out of control hoarding, when the people won’t even throw trash away. That is way different then having a well stocked pantry of goods or the like. Heck, I live in Florida, and we are recommended (by the government) to have stock of supplies that will last for several weeks in case of a hurricane or the like.

tfr April 12, 2011 at 10:49 am

I’d love to hear the rest of the “Navy man” story… namely, what happened to the food? My bet is that the authorities sat on it for a couple of years and then trashed it.

A. Viirlaid April 12, 2011 at 12:16 pm

tfr you are probably right on with your speculation.

Please see “Farm Bill Follies” at http://mises.org/daily/2662

Here’s a quote:

In the 1930s, legislation was enacted to alter the inevitable economic consequences of progress.

Politicians wanted to help poor farmers who were being squeezed by the increase in productivity and fall in prices. A whole raft of measures was concocted to keep farm prices high.

The correct understanding was that, if supply can be artificially restricted, prices would be propped up.

The various methods included the destruction of massive quantities of crops and millions of head of livestock. While it effectively reduced the supply, it was kind of embarrassing for the government to be seen destroying good food at a time when millions of people were starving in the Great Depression.

The alternate method of enforcing restrictions on amounts a farmer could produce was emphasized. Millions of acres of crops were plowed under. The government also paid farmers not to plant crops, and bought millions of tons of commodities to keep them off the market.

Perry April 12, 2011 at 1:14 pm

My brother-in-law tells a depression era story of authorities riding in and shooting his great grandfather’s hogs, on his Idaho farm while the family huddled in their cellar. They feared for their lives not knowing who had stormed their farm. They also burned a bunch of his wheat that he was apparently “hoarding.” The authorities were tipped off by a “concerned citizen.” I think it’s sage advice that she gives at the end about hoarding quietly.

Tony Fernandez April 12, 2011 at 11:08 am

Hoarding already is destroyed by inflation. Popular opinion against it isn’t necessary, but is just the icing on the cake.

Shay April 12, 2011 at 12:10 pm

That’s why you hoard things other than dollars; then it’s a stable store of value. As the article says, non-perishable food/household items are a great place to put a small savings, as they aren’t devalued by inflation.

Tony Fernandez April 12, 2011 at 1:39 pm

I’d also surmise that inflation makes life terribly hard for a student. Most students are living on the edge when it comes to their own personal accounts, so to get a store of savings in commodities would be very difficult to do. To have money in savings would work, but with inflation it really is a net loser.

Deefburger April 12, 2011 at 11:23 am

Pay cash when you “stock up” or the banking system will reveal your motives. The “All Seeing Eye” on a FRN is the bank itself, and they know where and when and on what you spend in todays electronic money system.

Robert Nathan April 12, 2011 at 12:36 pm

I wonder if hoarding applies to real estate.

Joe April 12, 2011 at 2:17 pm

FDR, via executive order, did not require Americans to give up their gold. It is only ignorant blind Americans who followed the order and who perpetuate the myth now. An executive order pertains to the executive branch and is instruction (policy) from the chief executive about how to administer existing law. A president does not have power to take citizen’s property. It is patently absurd. Only a nation of sheep, who are too stupid to find out and understand the basic boundaries of government and law, would believe and act on such a preposterous lie.

Joe April 12, 2011 at 2:45 pm

@Joe
I don’t know whether your are serious or not in your comments. Please read the following and see if the president with a Executive Order can take your property.

Executive Orders

In times of emergency, the president can override congress and issue executive orders with almost limitless power. Abraham Lincoln used an executive order in order to fight the Civil War, Woodrow Wilson issued one in order to arm the United States just before it entered World War I, and Franklin Roosevelt approved Japanese internment camps during World War II with an executive order. Many other executive orders are on file and could be enacted at any time.
Why such a hard line aganist Americans? You can’t make a point without getting nasty? Also, you are giving me a bad name by using my sign-on. Now all the people here will think it was me. Get a different sign-on and if you don’t want to I will change.

J. Murray April 12, 2011 at 3:16 pm

It’s hard to ignore an optional instruction when there are men with guns willing to shoot you for failing to follow the optional instruction.

Joe_2 April 12, 2011 at 4:17 pm

I am very serious. I have seen and heard this gold story repeated over and over again, especially
lately. It does not help at all for the citizenry to have an illusory and false understanding of
governmental powers. I have little, if no tolerance, for my fellow idiot citizens who believe and
act upon government lies when the truth is not that hard to find. (Hint: the government lies, lies
all the time about most everything, and even lies when the truth would serve it well.) What is not
said by government is often as important as what is said. You can listen to the Dave Champion Show (Google it) to help start breaking your mind out of the governmental prison.

The problem with a citizenry that does not understand the basics of constitutions and law is that
it ends up with me having to live in society where my rights are curtailed and infringed upon and
the freedoms of my children and future generations are being ever diminished. This to me, from
citizen ignorance, is intolerable.

Presidential powers are spelled out in the US Constitution. Congress passes laws. No executive
order can direct the executive branch to do anything outside the bounds of the executive’s powers
or the laws Congress passes. That is the framework. Any executive order that is outside the bounds
of the law or constitution is null and void. Marbury v. Madison, 1803 “A law [or executive order]
repugnant to the Constitution is void.” Therefore executive orders and laws are written in a very
careful manner to deceive you and the rest of the public (since you most likely do not understand
the rules of statutory construction) while remaining constitution. I have read much law, most of it
is perfectly constitutional. The problem comes in with the application and execution of the law. The law is mal-applied to areas, people, and circumstances which it rightly does not embrace.

The problem with misunderstanding of law almost always deals with an improper contextual framework. All law is contextual. We begin in the country with unalienable rights. Then we proceed to constitutions which nest within the boundaries of our unalienable rights. Then statutes which nest within the powers granted in the constitutions. Then we have regulations which nest within the “broad framework” of the statutes.

Contextually, the “persons” required to deliver gold to the Federal Reserve (individuals, partnerships, associations, and corporations) were those who were in the executive (since that is
who executive orders are addressed to) who held gold. Contextually, it did not and could not
pertain to any citizen who owned gold since we know (right?!) that citizens have unalienable rights
to acquire, use and dispose of property, including gold. It also did not pertain to anyone who worked for the executive who in their personal capacity held gold. The order’s proper constitutional reach was very limited.

If we look at the Act FDR cited as his authority (Emergency Banking Relief Act of 1933) we find this tidbit, “the term ”State” means any State, Territory, or possession of the United States, and the Canal Zone.” Applying the rules of statutory construction to this definition of the term “state” we find that it has been defined by Congress to mean areas under which Congress has exclusive legislative jurisdiction. Since FDR is issuing an executive order under the authority of this act we know that not only is the order limited to executive employees who in their official capacity hold gold, but it only pertains geographically to the areas above and does not include the 50 states of the Union. Whenever reading Congressional statutes it is important to understand that, “all legislation is prima facie territorial” [American Banana Co. v. U.S. Fruit, 213, U.S. 347 at 357-358]. That means that all Acts of Congress pertain only to their power in territorial areas unless something in the act embraces the 50 states of the union.

Who was required to turn in gold, per the executive order: persons in the executive, who held gold in their official capacity, within the territorial areas Congress controls (D.C, Guam, Puerto Rico, US Virgin Islands, Northern Mariana Trust Islands, military forts, docks, arsenals, etc…).

Nothing in the definition of executive orders you pasted above holds any water for a president being able to constitutionally take a citizen’s property. The president cannot override Congress as there are no emergency powers granted to the president (or Congress or the courts) in the Constitution. He does not have limitless power, pure BS. He and the rest of government would like us to think so. Where would he get that power in constitutional republic? He can only get it from us. We know that order for the internment of Japanese was unconstitutional. FDR was a traitor to his oath and country buy that act.

Joe_2 April 12, 2011 at 4:24 pm

@J. Murray – yes, there is risk from idiotic government enforcers. We have government tyranny and mal-application of law aplenty to their benefit and the demise of our rights. One of the main remedies is for the citizens to have a well-regulated (well armed and trained) militia who are ready today to enforce our rights if need be. The founders showed us by example what to do.

When the government fears the people, there is liberty. When the people fear the government, there is tyranny. – Thomas Jefferson

We don’t have freedom today. There is great national cognitive dissonance regarding our level of enslavement.

Joe April 12, 2011 at 6:22 pm

@Joe_2,
So now I understand your point. You don’t think there is any authority under the constitution for the president to steal property. Well, guess what? You are speaking to the choir when you speak to me and probably everyone on this site. So you are frustrated that citizens of this country are ignorant or apathetic and basically give away their liberty. What else is new?
Benjamin Franklin upon exiting the Constitutional Convention was asked what type of government they had created. He replied, “A Republic, if you can keep it.” Ben knew what it takes to maintain and secure what was established.
When the Congress and Supreme Court meekly bowed to the executive branch, FDR got what he wanted. The people did not rise up and impeach him or vote him out.
So the people gave up their liberty. They still continue to give up their liberty. So I think Benjamin could see into the future and unfortunately his sense of what was to occur is coming true.
As for the well armed militia I think that option is available but I cannot see a good outcome. I think the changing of heart and minds would have a better chance. You saw what Lincoln did to the South?
So I will end with another Ben quote something about if the citizens opt for security they will have neither security or liberty. The old guy was two for two.
Have a good day brother we have all experienced your frustrations.

Andy April 13, 2011 at 1:30 am

Shotguns work well against Stealth bombers and Abrams tanks.

Andy April 13, 2011 at 1:32 am

And nukes.

The Fringe Economist April 12, 2011 at 5:34 pm

Here’s a PDF of the actual executive order:
http://www.wellsfargonevadagold.com/confiscation-order.pdf

Criminal Penalties: $10k fine and/or 10 years in the big house.

I guess the optional part would be the option to be fined and jailed.

Matt R. April 12, 2011 at 10:00 pm

Save your nickels! They’re worth more than their face vaiue, as are pre-1982 pennies.

http://www.coinflation.com

jdd April 13, 2011 at 1:23 am

True hoarders are really scary and sad. My in-law is a hoarder. Her house is full of old newspapers, thousands of magazines, coupons, bills, used envelopes, and assorted other trash. The in laws built their dream house in Kauai. They have been trying to “pack” for over two months. Their house here in CA is uninhabitable.

The “hoarding” on TV is an illness. I’ve seen a lot of examples. It has nothing to do with stockpiling useful things like canned food (which goes bad eventually) or guns, gold, ammo, water, batteries, or other useful things.

Eugene April 26, 2011 at 3:12 pm

Gee, I guess we need to alert the Mormons about this food hoarding being illegal.

Doug Rodrigues April 27, 2011 at 3:43 am

The article was disgusting. If somebody wanted to stock up on food supplies, it’s nobody else’s business! I think the situation amounts to malicious prosecution and is un-American that the couple should face any type of prosecution! Is this what our modern day Federal Government has turned into? Millions of Mexicans pouring across the border, 99% unchecked, but the Federal Government goes out and makes an arrrest for a couple stocking up on food. If it wasn’t so disgusting, it would be funny! I’d like to read the Federal Law that makes it illegal for anyone practicing common sense…something the politicians lack.

Jerry Hunsinger April 28, 2011 at 9:21 pm

Great article, Wendy, thank you. Unfortunately, those needing this advice the most, dwellers in large urban areas, will probably never heed your advice, or even see the article. Rest assured that those of out West might even be a little ahead of you. Canned goods and ammo, that is what we are saving.

Best,
Jerry

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