10L+ per square meter for land....

That's what Anshe seems to be trying to sell off her new sims for.

And people are actually buying.

Given that most of the normal land that is for sale is just being held on to at the moment because sellers think "I can eventually get this much, someone will buy it eventually", why would they not just raise those rates to match Anshe's high prices?

I foresee land prices going up 3x within 2 months.

But I truly hope i'm wrong.

I'd love to live in a sim that's named the same as me!

Even though, we are competition for Anshe, I have to say that this is wrong. Anshe is asking 9.11L$/m2 for waterfront in her new mainland sims. Thats a little less than current market price for waterfront on the mainland. I am not exceptionally fond of the style of landscaping there. But that is personal taste. The prices are perfectly "normal".Why should this happen? Even is she were asking 10 L$/m2 there are still many real estate groups, THE OTHERLAND GROUP among them, who are offering land well below this...

Don't worry I'm pretty sure you're wrong, no matter what buying a sim is still $1000 which can come around L$5.5 / sqm including one month of tier. There will always be somebody willing to undercut another if there is room. I don't really blame the price which I do agree is about where waterfront land is around. It gives her about 5 months or more make money. For 30 sims at once, she'll need all the time she can get.

Heck if price do 3x I will be the guy buying sims and selling them cheaply.

All sims are either worth absolutely nothing at all because this world is a pure fantasy that only exists on a computer or in other words it is a game for which all landowners are paying hard cash US dollars to participate.

Or all virtual land has fungible value that is determined my the market place (that’s us) and accessed on its perceived economic worth. That can be defined as selling it on to the next punter or alternatively using the land to generate an income in the form of Lindon or real Dollars. To use a UK economic expression, footfall, or what you lot call dwell matters too because the more people that fly over or visit your land the greater the chance it can be used to generate money or moneys worth

I don't think it really matters what colour or texture it is (on a slightly longer term basis) as that is dictated by fashion which changes, providing it can be made flat, square, and near to water. That maximises the economic benefit in terms of usable area, but within certain limits can be formatted to taste.

Finally the whole of Second Life could be a massive speculative bubble or “Ponzi Scheme” that is doomed to failure, see http://www.google.com/search?hl=en&q=ponzi+scheme&spell=1 or it is possible it could be a brand new way of entertainment made possible by the Information Age.

After all I was using the Internet in 1995 as a hobby type thing and if someone had told me a search engine that earns most of its money by people clicking ads would be worth hard cash US $128 billion I would have laughed before showing them the door http://www.google.com/search?oi=stock&q=stocks:GOOG&prev=/search%3Fq%3Dgoog%26hl%3Den%26lr%3D%26sa%3DG

Eeee gads I think that the cost of those sims is around 4L$ per m. Nice profit margin, if you got 10k US$ to spare.

btw edit your post you mention someone by name that you can't and it will be considered a personal attack.

Funny, how rumours spread in spite of contradicting facts.

Anshe is not asking 10L+ but 9.11 L$ per sqm.

And "profit" is not equal earnings - price (which was 4.20 L$/sqm at current exchange rates) but profits - costs. Contrary to popular opinion, costs include a lot more than just the price at the auctions.

I guess she still makes a nice profit. Yes. She is accepting a high risk too.

Yes I agree, and have commented elsewhere on that point.

And further to my previous post on this thread why cannot Lindon abandon the Lindon dollar and make all transactions within the game real ones.........

They could just about do it providing they act now and fix the exchange rate at $2.5 Lindon to equal one US cent, making sure that was the minimum size transaction and turn themselves into what in the UK we would call a licensed deposit taker

Its and step further into "cooperate SL" and ugly like every suburbian Anshe dream <shrug>
Landprices are decent if you like to live in squared of regulated areas...

The land in Islandia is selling like hot cake. We sold off one and a half sims last night alone. Most takers chose flat, squared off, shapeable islands next to protected water channels over highly landscaped mountain ranges.

The zoned Dreamland continent is also almost completely sold out. We had to turn down people asking for "flat, squared off sand beaches" in the "suburbian Anshe dream" of western Dreamland, because that land was bought up lightning fast.

We don't educate our customers, we serve them.

Oh I know there is the cost of dividing it up, making those signs, advertizing, hiring someone to mod the land, thinkinig up a new theme. I'm not as against Anshe as ppl might think. Free enterprise is a good thing. I question the balance of SL however

sorry i was rounding it off

Heheh I've seen former telehub land selling for 10 bucks a meter.. probably because the owners missed the rebuy boat.. but why would I buy it?

Back on the point of the origional post, for just a moment. Land prices will always rise as L$ prices fall (or, in the case of the new quoting method, rise). And yes, like it or not, the L$ IS loosing USD value. This is because yes, like it or not, L$250 -> L$276 (and still going) IS, in fact, a big deal.

The origional poster is correct in assuming that land prices could multiply by a factor of 3 within two months. This prediction would come true in the event that the L$ devaluation trend escellated and L$ value declined by a factor of 3 within the next two months. I wouldn't leave you with all this doom and gloom though, there is also good news!

The good news is that land isn't actually getting more expensive if the origional poster's predictions come true! If the land costs 3x as much L$ today as it did yesterday, it's because you can buy 3x as much L$ today for the same amount of USD as you could yesterday. Land resellers are looking for specific USD conversion ratios, and don't care what the day to day value of the L$ is (for purposes of pricing).

There are of course a thousand other factors that may or may not come into play at any time to influence pricing. Generally speaking though, during "normal operations" (if there is such a thing in SL) of a land trading business, L$:USD conversion ratio will be the single biggest influencer of land pricing. I hope that this helps to explain a bit more about how everything is always relative to everything else.

Summary: Even though land might, at first glance, cost more or less today than it did yesterday, it usually doesn't REALLY cost more or less.

True, as long as we are talking about residents buying all their L$ at LindeX and not living on stipend and earnings from some small inworld business.

Inflation hurts. It hurts almost everyone but the little members in a community worst. I would not try to "sweet talk" inflation into something that does not really matter.

That’s the second time I have agreed with Dana in this thread. In total.

Inflation does destroy value so the only way to protect your assets is to have it in what in the first life we call "asset backed investments" such as stocks and shares and property.

In Second Life the only asset that appears to have some definable economic worth is land, so buy land up to your tier level and sit it out. By the way is there anyone who wishes to lend me Lindons at a fixed rate of interest........

What I was attempting to explain was how L$ devaluation relates to in-world pricing of land. I wasn't attempting to "sweet talk" anything. I was simply offering a factual explanation of how land prices are set in relation to L$ value, while the value of the product actually remains the same in real life terms.

This is a nice reply, and I applaud your compassion for the "little members in the community", as you put it. It's wonderful to see such kind and community spirited land barons in Second Life! However, I don't think it's fair to the discussion to inject emotion into it, or to mis-label L$ devaluation as inflation. The inflation and deflation of land prices in-world, which seems to strike such a chord with you in terms of impact on the "little members in the community", is only a side effect of the real issue. What we should really be talking about if we're going to explore the topic of L$ devaluation itself is a currency price that is being artificially propped up WAY above it's value, repeatedly.

I think that when dealing with the topic of L$ devaluation it's more important to explore the CAUSE and underlying problems than the EFFECTS on any particular member or class of members of the community. The single most important fact is that when you have a welfare state (many members of the community "living on stipend", and lack even any significant tax on the "wealthy" to help balance the massive weekly gifting of welfare from the state to the "poor", devaluation of the currency is the only natural outcome.

It is also very important to note that due to the structure OF our welfare state (the way that the stipends work), the L$ is actually worth almost exactly L$361 per $1.00 US. I can agree completely that the effects of this economic roller coaster ride are not desirable. However, while this post may generate great PR for a community spirited land baron in showing sympathy for the EFFECTS of repeated L$ devaluation on the "little members in the community", it really does nothing in terms of dealing with the CAUSE. No offense, but your post seems more like a subliminal ad aimed at "the little members in the community" than a genuine contribution to this thread.

Maybe I'm wrong though. If this IS the case, I’d love to discuss some solutions to the CAUSE. I do think it’s possible to create a stable exchange rate. The only likely solution that I can see is to lobby Linden Lab to make a fundamental economic change (keyword: fundamental) though. Another solution, which would be less likely to occur, would be some sort of resident run economic stabilization institution. However, the community is so unlikely to band together and implement such a solution that it's hardly worth discussing here.

There are three main possible courses that I think Linden Lab could take to solve this devaluation issue once and for all. The first would of course would be to implement some sort of L$ denominated tax on the “rich” which would be hefty enough to recover roughly 28% of the welfare distributed to all members of the community every single week. (Read: taxing YOU to subsidize the “poor”. Still feeling community spirited? ) I know that it’s been discussed in other threads, but I don’t think it is really fair to Linden Lab to do silly things like giving up their own revenue to auction sims for L$ etc as a sink. I think that if huge sinks are desired for the benefit of community subsidy then it should come in the form of a tax burden ON the community. This is obviously the way that RL economies try to deal with this sort of thing, so it’s worth mentioning. I don’t really think it’s the best solution though.

The second course that I think would be possible would be to redesign the welfare system itself in a fundamental way. This could be accomplished in a variety of ways. One good way may be to reduce the premium stipend to L$347, and the basic stipend to somewhere around L$0. Another good way may be to leave the amounts alone but put a cap on how long members of the community can receive welfare for. A shift in the philosophy of welfare from “welfare is the way you get money to buy cool stuff” to “welfare is to help you out while you get your feet wet and find your niche in Second Life” may go a long way. I would suggest 12 weeks worth of welfare as the cap. The last thing that I can think of along the lines of welfare reform would be to make you jump through a hoop to get your weekly welfare. For example, Linden Lab could set up some “welfare offices” throughout the grid, with each containing one “welfare printing press”, which would only mint one weekly stipend every 60 seconds. The long lines at these virtual soup kitchens would be so downright annoying that only the most “needy” will even bother, thus reducing the influx of L$ into the economy.

The third course that I think would be possible would be for Linden Lab to simply STOP DOING THINGS which artificially prop up the price of the L$ beyond its value of L$361 per $1.00 US, and just let the L$ trading take place in the neighborhood of the real value. I think that this course of action makes the most sense. All of their tinkering to try to make the L$ seem to be worth more US dollars than it actually is really does hurt the economy a lot through the pricing roller coaster ride that it causes. There is no shame whatsoever in admitting that a dollar is actually worth L$361 rather than L$250. They state this already through their membership cost and welfare dispersal amount. If they would simply stop taking contrary positions between what they say L$ bought from them is worth, and what they say L$ bought from another resident is worth, L$ pricing could stabilize right around the true value. In-world pricing stabilization would quickly follow L$ pricing stabilization, and ALL members of the community would then benefit by being able to participate in a stable economy rather than an economic roller coaster.

So, these are my thoughts. I hope that all members who are concerned about this problem will chime in with other thoughts on how it can be solved. Identifying with the EFFECTS of the problem upon the “little members in the community” is obviously quite easy, but actually putting an end to the CAUSE of the economic roller coaster ride will prove to be a much more complex task. If any solution to this problem is to be implemented, it will definitely take a MASSIVE effort on the part of residents. This will be true whether it is a resident based institution or a fundamental economic change from Linden Lab which finally stomps out the problem.

Seems as if I have ruffled some feathers.

Sorry, Shaun, that wasn't my intention. The reason I was not talking about causes was simply because the original poster and all the other commentators before me were talking about effects and not about causes. I'll gladly discuss causes with you. Let's just start another thread!

I agree with much of what you said in this long lecture. I disagree with some. I simply don't agree for example with your attitude that it is "mis-labeling" when I call L$ "devaluation" "inflation. "A rose is a rose is a rose ...". Constantly rising prices are ... A decreasing exchange rate will inevitably lead to rising prices for land and for many other goods too. Creators will not simply accept that their earnings fall indefinitely in real world terms.

And - believe it or not - I was not trying to portrait myself a Robin Hood. But inflation (sorry that I use that ugly word again) hurts those most which are the last in the chain. All the others raise their prices. Stating that fact was no attempt to turn this discussion around. I was simply stating my attitude towards inflation. A little is good for a growing economy. Too much hurts.

I have not intent to become a SL politician (do they exist?). So please don't try to de-valuate my attitude as "great PR for a community spirited land baron". Nobody believes a land seller (I don't feel a baron or baronesse) anything anyway. Please don't belittle my opinion just because I sell land.

Let's discuss cause and effect - in a new thread maybe?

I never claimed that giving your customer what your customer deserves is a bad thing.
What i am getting bored of is when people try to sell it as the best invention since sliced bread

What's wrong with a tax on the rich? One simple way to implement it would be to have a $L component to tier -- I won't speculate on how much it would be at any given level, since I have no access to empirical data.

Redesign the welfare system? That's easily said for someone who has already "found his niche." Capping welfare, or imposing a time-on-line penalty for receiving it, is, IMHO, elitist, and the sort of idea that will drive SL out of the realm of "entertainment" and into something else entirely. It will drive people *out* of SL -- particularly, those who are in SL for fun rather than profit. And, as a practical matter, do you think LL is going to even contemplate doing anything that cuts their own customer base?

Speaking of empirical data -- the assertion that the $US price of land is remaining stable, despite the change in relative value of the $L, is an interesting one, but do we know if it's true? The fact that LL continues to sell new sims at $1,000 US is not the whole answer.

The total number of registered SL users seems to be growing at about 1,000 per week. What the dropout rate is, and whether the average number of users onlinee is going up or down and by how much, are other possible subjects for empirical study. How many users -- especially new users -- want to buy land, other than first land, and how much? These are, more than likely, important factors in the *demand* for land in SL, which is -along with the supply, of course -- the ultimate determinant of the value of that land.

The supply side is what is being largely ignored here. The cold, hard reality is that LL can, within some limits, do whatever it pleases to the price of land, by the number of new sims it releases into play. If LL decides it wants to encourage more people to become "land barons," it can whip up a new continent, sell the sims at $250US (or whatever!) apiece, limit four -- or one -- to a customer, and the price of existing SL land *must* go down.

What's wrong with "inflation", or at least increasing $L prices for land, anyway? Doesn't that work to encourage people to become "productive" in SL rather than staying on stipend? The answer to the first question is, not much, it just helps the rich get richer a little faster. The answer to the second question is, of course not -- anyone who decides they want to own "x" m2 can simply buy the $L to do it -- and each transaction of that sort tends to drive *down* the $L-to-$US rate.

Modeling any economy well enough to predict effective policy measures is hard enough. Making policy predictions without empirical data is pointless. Maybe there are some grad students in economics, somewhere, who are sufficiently hard up for a thesis topic....

My problem is tha i rent out and use the Lindens to pay for the sim.
With inflation i will have to raise prices wich means that folks able to afford land (we talk here in truth about prims) will not be able to do so anymore.

Iow the "wellfare"will have to grow more wich means more inflation or Linden labs finds another way to keep the linden someway stable.

I am very much for "wellfare", i dont mind to pay a little bit more so people wich can not afford to buy lindens have there fun too, a lot of my friends would have to leave SL if we go for a "pay fully what you are using policy"

But it has to be done in a way that it is payd for, very much like a RL wellfare systhem, if you pay it by printing money you do noone good in the end.

SL should be something affordable for as many as possible, there are a lot of very creative people wich add a lot to the experience and flair of SL wich are terrible in terms of economical skill, if we start to make SL something for the rich we will loose a lot.

My opinion is tax the rich fairly and use the money to keep the linden stable and support the people wich cant afford to buy lindens in a sane manner.

And yes, i would be on the paying side, but i really dont mind for the simple reason that i am the opinion we would gain more than we pay, plus SL could be a modell of a societie wich cares and is not a country club where the haves meet and the have nots can look in from the fence.

Will it be easy to archive? For shure not, SL runs on a lot of expensive hardware and needs skilled people to maintain it wich means good payd people or they work elswhere.

But the outcome is preferable over an country club SL.

Maybe if everybody running a buisness n SL thinks about offering jobs and paying them fairly starts to do so we get something going.

Start to respect other peoples work, pay fair prices for stuff you use, dont take part in copyright violation, hire someone to do textures or scripting better than you can do it and focus on the stuff you are really good at, do more than making a few toys and setting up another mega mall on your land, offer a SERVICE not copies of your work.

If you have a good running economie jobs are plenty and the moneyu to allow :have nots: to take part is easily to raise.

The reasons someone is not able to pay what SL costs to run are plenty and a lot of them are not in the power of the individual to change.

Will there be free loaders wich play the systhem to get in for free?

Shure.

But if we start an strict "pay for play" SL will be a lot poorer, not by economical means but by diversity and spirit, "content"

One of the things I like about economic theory is that it works out more or less the same way in any environment be it virtual or real.

Centralised economies with high taxation and welfare dependent citizens don't work. Go back at look at history, for example my own country (UK) under a Labour Government in the 1960s and 1970s had taxation on income and capital gains approaching 98% for the super wealthy. It took a Trade Union demand for yet more money ("The so called Winter of Discontent" to finally persuade the general public to go with the Tory party under Margaret Thatcher and permanently ditch socialism before we could hold our heads up financially again.

In fact almost any type of "ism" and "market economy" should not even exist in the same sentence.

Yes I realise that in Second Life it is necessary to have a certain amount of socialism (welfare dependent subjects) to drive the business forward in first life, but that is only because many of the skills necessary to succeed in SL are first life dependent.

But I think the solution to the economy inside SL is to reward those who are prepared to take financial risk by owning land, not take money from them by taxation.

Perhaps after a certain period SL should phase out basic stipend, which might encourage more people to own property and participate more fully

If England fares really better after thatcher is something for debate, i dont see it really.
Claiming that a social modell of capitalism is bad because it worked not is as logical as saying "This combustion engine thingy will never make it because this specific engine doesent works very well, better take steam engines, they are cheap, reliable and safe", and argument you can read about plenty in older forms of forum discussions...

What is needed is a modell wich allows "wellfare cases" to participate in a emaningfull manner but encourages to do more, contribute to SL, furthermore we need some way to pay content wich is not per se economical value.

Building up a good looking sim means a shitload of work and investing money because there is a lot of prims involved you simply can not get payd for, the most beautifull isles and places in SL are ALL in economical terms idiotic, they are payd for by the people doing them and free for everyone to enjoy for the simple reason theres beside dwell and developers prices, wich got killed by the moneychair crowd, no way to really "tax the user" for.

Solution, fence them off and take money from folks to enter them.

So we have the mega malls (wich are a safe way to make money) Anshee land (wich is a safe way to make money) and what else?

Do you really think SL will survive by theese two?

Heres a hint, booth dont pull the most traffic, wich means people spending there time there, the sims wich really attract traffic are the "Free for all to enjoy sims" wich managed to beat even the "pay for stay" areas regulary.

But they are not smart in economical terms because you can hardly make money with them by direct means, SL has not the mechanics for that, and it is questionable if people will pay for simply entering an area or if they cough up 10 bucks per month to play on another platform where they can go where they want and get it at "flatrate price"

I mean, would you pay Lindens every time you enter another zone/sim/isle wich is not a mega mall?

To run a sim economical you have to earn at themoment between 1.5 to 2 lindens per prim per week.

That leaves not much room for scenic sims because every prim wich is eyecandy is a prim you cant rent out.

Land is not the real problem, its the ressources of the land, prims we talk here.

I can divide of plots and rent them out but how many prims is defined by the area i rent out automatically, no way to allocate them as i want.

So i can cut my isle into many small plots and have nothing better than a laggy maingrid copy, only a little bit more expensive as soon i want ot earn of it, i mean if we talk economics, i payd 1200$ to get it and 195$ per motnh no matter if i make money or not, so i invest and have a risk, i need to build at least reserves for bad times, plus if we talk economics i want my 1200$ back, right?

So a thatcher SL would look like...?

(to add, Anshee leads the traffic ranking with 90+ sims, but hot on her heels is Furnation with only four sims, wich is for 90% free prims, prims used to build scenerie, not malls or rent out to paying customers. do the math...)

Part of the problem is that there is no SL analogue for many RL skills -- and if you have no design ability or like that, your economic opportunities are *very* limited. And, we are not just talking RL lower or middle classes -- we are talking MD's, lawyers, CPA's. How many land barons can SL support? How many "dancers", etc.?

The idea of creating more jobs with decent pay is a great one. The problem is, right now there is very little -- make that *no* -- incentive to do so. If you tax land owners, you can offer tax credit for jobs.

Without the stipend, the market shrinks. The income for merchants drops, the demand for housing and for store space drops, *everyone* loses. We need to find a way to make this work!

We talk here about the folks wich can not afford to buy linden for RL cash, wich is by a way important too, noone buys lindens sim owners dont earn RL cash to pay SL sims, for example.

An MD or Lawyer will most likly be able to buy a shitload of lindens, they are in general not on the lower end of the income scale....

What we need is "service", get your creativity up, not everything is buidling stuff selling it and then build more stuff.

How about someone whos good at comedy doing some stuff, organice events, offer services beside buidling houses or making textures, there are for shure a lot of ideas beside buidling stuff wich could be tried out, some will work asome not, and a lot of them wont even need land.

beside the linden is taxed already, try to sell lindens and youll see...

SL simply will need more beside making stuff or go shopping to work over as longer period of time, cuz if thats the only thing we all do the asset server will be full in no time..

Sorry, I've been meaning to come back and write some replies in this thread, but I've been really swamped with a few things. In the mean time, here's another thought. The best solution to the L$ problem would most likely be the elimination of L$. Replace that L$ symbol with a US$ symbol. You would the be able to deposit US$ (some minimum amount.. US$10.00 or something), spend your already deposited US$ within the system, or withdraw US$ (same minimum).

No more L$, no more LindeX, no more roller coaster. Although, this will of course be shot down. Sadly (for some who believe everyone should work to create entertainment for them for free, lol), if this were implemented there would then be no more way to get free stuff from the content creators who provide said entertainment.

It would REALLY make in-world commerce a lot more stable and reliable if the micropayment transaction system used the same currency as the tier billing system though. For example, if you have 1 sim, you will then know that you need to generate US$195.00 per month in order to break even. Contrast this to L$ which may be worth L$250/US$1.00 when you set your prices (for whatever you're offering), but only worth L$280/US$1.00 when your tier date hits.

Thus, you may have rented out all your plots (or whatever you're doing on your 1 sim) for 1 month and made your L$48,750. Unfortunately that doesn't matter though, as your L$ is only worth US$174.00 when tier day comes about. Now you're not breaking even as you'd intended. If SL had allowed you the ability to just bill directly in USD however, you'd have collected US$195.00 in rentals rather US$174.00 (L$48,750 which you thought would be worth US$195.00, but which devalued in the mean time).

Makes a lot of sense to me. What's everyone else think?