What is the true value of the L$?

There are many posts in this section of the forums currently exchanging wildly differing ideas and viewpoints about what is the true "value" (exchange rate to the US$) of the L$, and what influences this value. Those who would like to see a higher value are suggesting provisions ranging from "adding new 'sinks'", "throttling the 'sources'", "paying interest" etc. Implementing these suggestions would change the so called "fundamentals" of the SL economy. I am sure, some of these measures would work - some of them with unwanted side effects, though.

What seems to be missing in this discussion, IMHO, is the fact that it's not only "fundamentals" that determine the value of a stock or currency. Sad as it seems to us rational (?) beings, exchange rates are determined to a large degree by psychological factors and assumptions on future developments.

A "strong" currency (or stock) is one in which you trust (to develop in a positive way). Trust is fuelled by leadership, visible leadership in words, visions and actions. Often it is important (for the company or government) to communicate with the market to show this leadership and build up trust. That's why I would love to see a little more communication by Linden Lab on economic matters, a little less surprises and a little less closed-mouthness. Show us, that you care!

Maybe this would add to the L$'s stability at least as much as some of the suggested changes to fundamentals - and with less unwanted side effects.

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Valid point Pham. How many times in RL do you see a company release positive figures only to have their share value drop for other psychological reasons? In any market, psychological factors play a huge role.

Sometimes in real life "the news is already in the price" and people sell to take a profit, and I have done that both personally and for other people. However the real hard bit is judging WHEN to sell. Fairly recently for example I purchased some Google shares at around $200 each (only a few I am not rich). I sold them at $300 well pleased with my clever self for spotting a chance........

However at $433 (yesterdays close) I am now well pissed off with myself.

Finally if you are interested in price movement do some research on Lord Rothschild and how the LSE was controlled by him after the Battle of Waterloo. But I suggest you stick to the financials and ignore all the masonic stuff

PS Nothing to do with SL, a slight digression but interesting I hope

Of course it is. The price on any kind of open exchange usually reflects the (assumptions on the) future and not the "current state of affairs". What might be one problem these days with the L$ is, that there is no official statement at all by LL on its attitude towards the development of the exchange rate.