Linden Currency Manipulation

*scratches head* where was the insult ???

To clarify - Jauani once came on like a friend, but every single time we've exchanged words in the past 6 months he's managed to belittle me and condescend to me, sometimes in subtle ways such as this. He did it again, and now acts like he's got no clue. So kiss my ass, Jauani.

holy crap! you should exchange war stories with siobhan.

this is crazy talk ananda. from your post there was no indication at all that you were aware that anshe was acting as a currency exchange or you wouldn't have suggested she might have the need to cash out on GOM. i can pass this off as a misunderstanding, but if you still want me to kiss your ass i will go work on the appropriate animations immediately!

Just stop now.

Pat yourself on the back, you managed to press my buttons. Very few can pull that off.

Looks like you pressed your own buttons...he made a statement of fact .

Do you have ANY idea how hard it would be to move 43,000 USD out of SL?

Let's all swarm at the silly girl who showed a moment of emotion, huh? "I think you don't understand" is NOT a statement of fact. It is a typical Jauani reasonable-sounding dig. It is Jauani, as usual, assuming that someone is a complete idiot. I was well aware that Anshe trades currency. My point had nothing to do with that! My point is that with an account balance that compares with entire currency markets, she doesn't necessarily have the option of cashing it out. She's got a liquidity problem. 'k?

That is also NOT a statement of fact! both are assumptions.

so now do i get to tell you to kiss my ass because we are having a communication gap?

It's all cool, Ananda. I've lost my shit with Jauani on the forums as well. But then I bought his land and then I bought his land and then I bought his land and then I bought his land and then I bought his land and then I bought his land and then I bought his land and then I bought his land and then I bought his land...

Don't let the pick-on-it police get you down!

Y'know... actually, the GOM is in a different position than IGE or Anshe's currency trading service. The GOM folks don't actually own the currency traded on GOM, they just allow people to post L$s for sale or orders to buy.

So, yeah, Anshe does have a liquidity problem with the L$'s she owns. With all the other games that IGE trades in, it probably wouldn't hurt them to sit on L$'s for a while if the value took a drastic nosedive, but I assume Anshe trades only in SL currency. I could, however, be wrong.

i see what you guys mean about the cashing out problem. but it is that problem that also insures a certain degree of faith from the community in anshe.

if you take IGE for example. buys for 4, sells for five. IGE has bought 300k from me on a single day. so i can assume that IGE may very well sell 300k on any given day. that is such a low ball estimate in my opinion. regardless - IGE made a margin of 300 dollars. (people who track GOM can give a better idea of daily volume of L$ trading). so every month, IGE could potentially be making a margin of 10000$US on their 40000$ stockpile. that's 120k $ a year. that is a huge return. and at the end of it, if SL folds, IGE walks only loses the investment.

even if my estimate is wrong, and IGE is making a margin of 100$ a day, that's still 40000$ a year! that is a very good return on investment. that is ridiculously good.

but anyway, i think IGE's revenue is way higher. and what, they pay three college kids 7 bucks an hour to "k i'm here for ur pik up! thk c u "

so if you are exchanging currency, you really don't need to take your money out. you got it out in a few months and no one noticed.

Keep in mind, IGE trades in more than SL, while GOM does not.

I shared my opinion on what effect recent economic changes might have on the Linden$ with the original poster of this thread. I tried to be helpful to her *sighs*.

Well, it is understandable that some are curious now why I have so many L$ on my account. Here are some reasons:

- I did not consider 3.60 US$ per 1000 L$ proper rate for L$, especially not after economic changes

- Percentage of L$ held by IGE and GOM continuously declined since October. While general circulation increased their inventories did not.

- IGE greatly increased their margin to about 20%, so I decided not use their service. Instead I continued using GOM and implemented my own fixed price L$ shop on my website.

- Having many L$ on my account shows my investment in SL and make it easier for people who don't know me to develop trust in my business and my dedication to continue it.

- Because of need to implement fraud measure my Linden$ shop on my website was delayed, while I was already buying L$ via my website for several weeks. My service to buy L$ from people also prooved more popular than I had expected.

And some thing to dispell myths:

- My SL wealth is not result of my RL wealth. It rather reflects insane investment of more than 3000 hours of hard work, including weekends and times like 4 am at night of my local time.

- I am not hording L$, they are all for sale at rate much lower than IGE.

- I am not going dump L$ on market for cheap. This would be most stupid thing one can do.

- 10 mio L$ is still insignificant in one economy with hundreds of millions of L$ in circulation and more than 3 mio L$ traded daily (!) if you combine GOM, IGE and ANSHECHUNG.COM

- I am not Jeska Linden's alt nor am I secret Chinese government agent trying take over USA via Second Life

- I don't know if what I do will succeed. Maybe it will fail. But I currently consider opportunity at least slightly greater than risk

Wooot! I am leader! Everybody follow my orders now!



Now I got caught! But Linden$ is just small part. I am also manipulating value of the US$ by cornering world currency market because I refuse sell US$ too cheap now. Eventually this must drive up US$ versus EUR and me telling you that is INSIDE TRADING TIP! Omg!

Anshe Chung: "Wooot! I am leader! Everybody follow my orders now! ".

Try and make me!

BB

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"he is as Valiant as the lion" --------
Troilus and Cressida; Act I. Scene II.
William Shakespeare
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I don't think that's been proven to my satisfaction at all. Most(all?) RL examples of so-called "market failure" are actually the result of state intervention, IMO.

Regulation creates oligarchy and corruption.

If someone tries to "corner the market" in $L, corresponding price pressures would cause an arbitrage opportunity for anyone else with a significant amount of spare $L.

I think that SL is still so small, and lacking in "survival pressure" that most people don't really try to compete with the market leaders, out of ideology or sheer ignorance of what is possible, or fear. As price discrepancies grow, and ludicrous opportunities drive more people into the "making money" game, an equilibrium will be reached.

No. Check out the effects of "destructive competition" on profit, service, and corporate survival over the last 200 years. You'll find that economic expansion levels better and corporations perform better over the long term in a regulated environment.

Also check out the record of unregulated business practices having a direct effect on long term performance, such as core loyalty, product durability and lethality, litigation, and the ability to attract new investment. Again, it's pretty clear.

Also, check out the effects of early attempts to regulate the business environment on actual corporate oligarchies and widespread corruption that already existed. Take a look at consistantly-rising profits in a more stable economy.

But I agree with you that price pressures and other "naturally occurring" characteristics can regulate certain features of the SL economy.

The issue is not so much regulation, as what kind of regulation and how it's done. No one, no one, in the political mainstream of any industrial nation seriously proposes going back to an unregulated environment.

SL is wide open. It should be possible to speculate on what sort of regulation might make a more stable, profitable, survivable environment without being mobbed.

But I'm not too concerned, because so far it's just a game.

I think its funny that everyone is so misguided about Anshe's wealth.

Lets look at some simple numbers k?

I have been told that there are 20,000 active members in SL active meaning paying.

Well lets just look at basics shall we.

Base stip for a 9.95+ smallest land tier is 500 per week that never changes...at all as its not affected by rates or any of the other little things in sl.

So Just using that 500 per week times 20,000 players that 10,000,000 per week dumped into SL. WOW thats as much as she has and yall, are freaking that she is super Rich?

Now lets multiply that out over 52 weeks which by an estimate of the time Anshe has been in world is about the same time amount.

Thats 520,000,000 Lindens dumped in SL in 1 year and everyone is bitching cause it seems to be apparent that Anshe has amassed such a wealth....???

Geesh get a grip she has about 1% of 1 years base that is dumped in SL were she greedy she would have 100,000,000 or more but its only 10 mil I mean geesh.

You know!, I just used the base stipend there the unchanging one. Hell, I havent even included dwell/nor rates nor any of those other factors.
SL economy as a whole has a lot of money going in.
The rate of influx was severly devaluing the exchange rate based on populace.
People that worry about 1 individuals earnings and whether they are succesful or not compaired to that individual havent got a clue about the bigger picture.

Sorry folks I find it rather funny if not mundane that everyone seems to want to point a finger at Anshe when you should be more worried about those that stay under the radar that dont show up on the leader boards. Because those are the very people cashing out daily and rolling the flow of cash not the ones that its kept in their "inventory"

I am even guilty of that once a month.

Be wary of your witch hunts as you may very well find out the witch you hunt for is your very best friend. The really sad part of it is after hanging all the witches the things you used to enjoy and were protected from will then come to haunt you with a vehemence unparalled to the protection you once enjoyed.

Anyway I digress,

Sincerely, Shadow

Regulation of game world currency trading would be far worse than the disease.