In message <199603150738.CAA11310@jekyll.piermont.com>, "Perry E. Metzger" writ es:

Curtis Villamizar writes:

...

Hoarding is only effective if there is a scarce resource, even if it is artificially scarce, as in the two "gas shortages" of the 1970s (when there were huge gas company stockpiles and enormous gas company profits).

The gas shortages of the 1970s were caused by the fact that the U.S. government regulated oil prices. Whenever you artificially lower the price of anything, you create shortages. When decontrol occurred, shortages mysteriously and totally stopped. Amazing, ain't it.

Perry, Just a point of history. The gas shortages were both triggered by OPEC moves which reduced crude oil imports. There were enormous oil reserves in all of the major oil companies. They were not willing to release those oil reserves because of their LIFO inventory practices, used to defer tax liability. The oil companies tried to convince the government to waive the taxes that were due if they sold down their inventory that was on the books at oil prices going back many decades. The govenment would not allow them to convert from LIFO to FIFO inventory and simply waive taxes on the billions of dollars of oil on the books for almost no value so the oil companies tried holding the consumer hostage in hopes of putting enough pressure on. There were no regulations on gasoline prices and they did go up but oil companies were hesitant to raise them too high and seem to be price gouging during a fabricated shortage but also didn't want to pay taxes on the profit of selling at the current price with inventory at the old prices. Curtis