DEFINITION of ‘Panic Buying’
A type of behavior marked by a rapid increase in purchase volume as the price of a good or security increases. Panic buying has the effect of reducing the supply of the good or security, while at the same time driving the price up even higher. This type of behavior is often the result of a feeling of being “left out” if a purchase is not made immediately.
When the PERCEIVED, not REAL, shortage of a product is in question, then the perceived shortage becomes a real shortage!
I worked in a company a while back that had, for a brief period, stopped supplying paper plates and plastic forks and spoons for its employees. An oversight? Perhaps. The reason is immaterial.
What ensued was as true to form as the principals of supply and demand in economics.
The minute the company restocked the kitchen with plates and utensils, they disappeared in minutes! Hoarding took over. Better to grab what you can now, for future use, than to risk going without in the future. In essence, the employees created their own shortage!
We can witness this in countries, like Argentina , where supply disruptions created a “hoarding” effect. (See article below).
This will soon become apparent in the Gold and Silver markets. As physical gold becomes scarce because of Central Bank purchases, and as physical silver becomes scarce because of lower copper/base metal production worldwide, then the panic buying will begin in earnest.
Again, the reason is immaterial. Perception is material, however. After all, the Central Banks throughout the world operate on the basis of public perception (if the public perceives inflation, then the hoarding and subsequent prices rises will ensue.
Imagine calling Kitco, or Blanchard Gold, for a purchase and getting a reply like: “We’ll put you on the list. It may take a few months for us to procure the metal, if at all.”
Seem farfetched? Ask the Argentines!
Or better yet, remember the gas lines of 1970′s? Did cars need to be topped off every few hours? They created the hysteria themselves.
CIGA Wolfgang Rech
Argentina faces tampon shortage as defiance of debts causes import trouble
Demand for the intimate hygiene product has instigated a public debate over Argentina ’s handling of foreign currency and creditors.
Daniela Perez, 30, said she could not find tampons when she was vacationing over New Year’s in La Lucila del Mar, a coastal city 222 miles (358km ) south-east of Buenos Aires.
“I was looking for three days,” Perez said Wednesday while shopping at a Buenos Aires pharmacy that did not have any tampons in stock. “Luckily, my sister, who was there, saved me. She had some that I brought back to Buenos Aires .”
Argentina imports most of its tampons from neighboring Brazil , said Ponce , the head of the importers’ chamber. He said it would take a few weeks for the situation to normalise, in part because of panic buying.
“People see the news, get alarmed, and then go out and stock up,” he told news site Infobae.
In recent days, Twitter has exploded with jokes and complaints about the shortage. Some said Argentina was becoming more like Cuba and Venezuela , where hygiene products frequently are hard to find.