Stabilization Of L$

Economics 101, isn't it? And not to nitpick, but I don't think it's a 50% chance is it? It's a little bit more unbalanced than that.

But... in what way am I not understanding this, or more importantly... what does that have to do with GOM trading or the subject of discussion? I don't see the connection.

The problem here is, if there are continually more sellers than buyers, the line to sell $L will grow longer and longer. Even if it is randomized. The whole randomization doesn't seem to fair to those who had the foresight to sell early. The inability to sell $L on demand is a critical flaw in your system.

That I think the problem is that your posts have me completely confused. First you are talking about an individual selling at US$3.90 or US$3.75, then the post I quoted you are talking about GOM buying at US$3.90. All the while you are trying to say that a system that does not sell at a certain price works like a single seller like IGE or AC? That is what I'm trying to understand. How can you look at a system working as an exchange and think that it works like its peices after understanding how they work?

Actually you keep misunderstanding the bullets that are shooting down your ideas and leaving them in tatters.

Let's say that at GOM the only price you can buy or sell lindens is $4. Let's also say that every week 1,000 new blocks of lindens are made available to sell. And every week 900 of those lindens are actually sold.

After the first week or so it won't seem like much of a problem, there are a couple hundred extra blocks on the market. No big deal cause they will sell the next week. The problem is, this surplus will keep growing. Every week the surplus on average will grow another 100 blocks. After a year the surplus would be 5200 blocks almost as many blocks as sold in 6 weeks. Who is going to wait 6 weeks to sell their lindens so they can pay their tier? Maybe a few people. But a heck of lot of people will seek out other means. They will sell on Ebay or to any service like IGE or AC that will buy. They will gladly take 5% less or more to get that money now. And there will likely be buyers eager to buy for less rather than spending $4.

Once people start buying lindens from other sources that are cheaper, the buyers for this hypothetical GOM will start to dry up. And the situation will get worse. There will be even more surplus each week, forcing more people to find alternative methods of selling their lindens.

The same process could happen in reverse. There are more buyers than sellers on GOM. Each week there are more and more people who are not able to buy lindens there because they run out of sellers. Eventually some of the sellers will get wise to this and find alternative ways to sell lindens for more than $4 per block. Other sellers will catch on and use that same alternative method making the deficit of lindens at GOM worse and more sellers will bolt.

Way... please... for the love god... your idea will simply not work. Let it go and stop bumping this thread.

50% chance the value will rise.
50% chance the value will fall.

(I am not a day trader BTW)

Sigh. Alexander, sorry dude, but you sound like you're backed against a defensive wall. Name calling is the first sign of such.

If you own a sim and earn your L$ from a game you host and helped design, then your statement that you "don't contribute any goods or services to SL" wasn't really truthful, was it? So my assumption that you played the GOM market-- especially in the context of the current discussion, was understandable.



Well, I'm sure you are FAR more educated than I am, especially since your opinions are without doubt far more valid than mine. So I guess I need to bow to your extensive wisdom and waive my right to state my opinions on this forum.

But just as a thought: if you think that the world's economy for the last four centuries has been good, I have to wonder whether all that education is worth a spit in a bucket. I also have to wonder, if you're absolutely 100% sure of your position and just know you are right... why you can't just discuss the issue at hand. Gotta be some anger issues there, bud.

Yes, I'm aware of that.
I left a little out in efforts to keep my post short.
I thought you'd get my point anyway, which you
seem to now be on the edge of.



But the PEOPLE who are on GOM paying their US$4
for someone's L$1000 will soon run out of cash on their
GOM accounts.

1) Smart people would try to sell L$1000 on GOM because they
would be assured of US$4. This means the GOM accounts
fill up on $L and run low on $US.

2) But, they would buy L$1000 on Mr.X site because they
could get it for only US$3.40. Sellers on Mr.X gets lots of $US
and some continue to get more $L from their biz in SL.

3) Soon the people on GOM can't buy any more $L because
they are out of $US (step #1). Also, why would the "buyers"
be buying anyone's $L on GOM in the first place is they were
forced to pay US$4 for L$1000 when they could just go
to Mr.X site and pay $3.40 ??

Gabrielle

Been there, discussed that. That's where LL comes in, with L$ sinks and L$ bonuses, just as they're doing now.

Actually, you're absolutely right there Dark. That just occurred to me this morning, and I meant to mention it earlier. The 3.90 figure I mentioned earlier is really invalid. It was based on a concept of someone somewhere making 10 cents on a deal... and I forgot that the scenario I'm presenting negates that need. GOM would take 1% off all sales as a commission, which would make both buys and sells a flat $4.00/1000. Thanks for mentioning that.

This is the issue at hand I am discussing.

You spout some new idea, which isn't new in the context of market trade, and then proceed to keep contradicting it later on.

And yes, the world economy has been better over the last four centuries. But I suppose you are right, it is evil, no sense letting people have money in their pockets and be able to pay for educating their children, who wants that.


And I made no claims on how my knowledge/education/intelligence may/may not outstrip yours, but on this topic you are clearly not knowledgable enough to make snese of the current system and how it actually does work, and how some of the sweeping changes and systems you have thought up will not.

Keiki, again, this has ALREADY been discussed. You're totally ignoring the LL machine in all this, and their ability to add or remove L$ from the market as needed. If a few blocks remain unsold, there is a glut of L$ and L$ sinks a few, increasing the buyer market. If there aren't enough to sell, LL increases the flow and more become available.

As far as letting go and stop the bumping of this thread... isn't that what you just did in posting? As long as people are interested in this subject, it's going to be at the top of the thread list. Or are you suggesting we don't allow "free enterprise" in thread posting?

Gabrielle, I'd really love to answer this... but I've answered it ALL before and I've spent enough time on this thread today. (in fact, I've answered these same questions about 3 times today. LOL).

K Alexander, if you insist on playing an ego game, let's play.

You run a sim? I run three. And a very large SL group. And an extensive merchanting system. Sucessfully, I might add. Your OPINION that I'm "not knowledgeable enough to make sense of the current system" just because I disagree with your "educated" opinion is frankly arrogant and insulting. So that's the nail on the head. You want to discuss the issue, I'll discuss it. You want to call names and insult, I don't have time for you. Now let's set the egos aside and get back to the issue of the thread, OK?

Yes, lets.

You hit the "nail" on the head with this statement.

If you are successful, then WTF are you doing here with this topic?

O, right, complaining that you can't cash in your $L for 3.90-4$US / 1000?

Or have I missed something in the times you have repeated this?

If you think that is the value, then by all means, go sell it where ever at that rate.

Umm... ok... so in order to stabalize the market for this to work, you agree that you have to stabablize the buy and sell pressure on the linden. The demand and supply have to be stable and complimentary for this to work, right? Ok, let's say that's even possible to get it just right, so that the supply vs. demand never fluctuated enough to throw the set price system out of whack. If that happened, then the current GOM would end up with a very stable exchange rate under their current system. And you would get what you want a stable, almost set price.

Of course, if the Lindens were able to do that--perfectly balance supply and demand through tweaks to money sinks and stipends--they will have achieved something that no economy, real or virtual has ever been able to do. You realize it's just nearly impossible to achieve that perfect balance that never fluctuates. In fact, no... I will go this far and it is impossible to achieve that kind perfect, non-fluctuating balance in a complex economic system like SL. If you doubt me, I would invite you to read a couple books on chaos and complexity and how it applies to non-linear systems like economies. They fluctuate and are unpredictable. That is their nature. You simply can't force them to be balanced and steady.

Keiki, I agree 100%.

But you made the mistake of telling WW to go and actually read anything.

Okay... HERE is the last one for you to answer.

On GOM, you pay US$4 and get L$1000
On Mr.X site you pay US$3.50 and get L$1000
Which site do you buy $L on?
(hint: Mr.X)

On GOM, you sell L$1000 and get US$3.96
On Mr.X site you sell L$1000 and get US$3.46
(each site takes 1% transaction fee, right?)
Which site do you use to cash out?
(hint: GOM)

More people prefer to sell their $L on GOM,
but since the people dont like to buy $L GOM
all the buyers will be on Mr.X site. Most people
who buy $L to USE (the player types) will go to
Mr.X to get $L cheaper, and the sellers will eventually
want their $US bad enough they (or some) will
go sell on Mr.X to get cash and accept smaller $US
rather than no $US.

I can tell you that I, for sure, would rather sell
my $L right now for $3.46 rather than wait in
a long line of people being forced to sell at $4.00
and where there are few buyers willing to pay
$4.00.. which makes the wait even longer.

I'm sure I'm not alone.

Gabrielle

Which is exactly what you shoul dbe doing ATM.

Go buy on GOM at 3.20 / 1000 US and resell on IGE at 3.34 / 1000 US. At .14 cents per 1000 traded you can at least get 250k $l swapped out at a higher price before they get a clue and close the hole.


.14 cents at 250k would be 35$ saved if you only used the current buy/sell GOM normally.

Hopefully if everyone here did that it may teach IGE a lesson (a little one I imagine, cause they obviously don't give an F about our current $L market holders), that flooding GOM with their 15mil in the last day is not the best thing to do in the future.

Except if you normally trade on GOM,
then you will need to get your cash back
in to GOM and pay the 2.9% + .30 fee
which eats up most the gain.

I think at this point, both sides have pretty well said what is needed to be said. Some think fixing the price will cause the economy to be stable, other say the market is going to deside what is stable. A stable economy is what everyone wants, I think we all can agree on that, but how do we get this ecoomy stable is the question.

I say remove sources and add sinks, the market will stablize when there is reason to be stable. I have yet to see price fixing work. If you can show me otherwise, I would love to see it.

So by that rationale are you saying its never worth it to take your money out of GOM?

Its even worse when you do it this way:

Put it in at 2.9% and then when u cash out through paypal take another 2.9% hit.

So, the first problem I have/had with GOM is the fact that they dont eat that cost like 95% of the other merchants who use PP, I know I have to, as does anyone who accepts CC payments through PP or any other merchant account program.

Honestly, both IGE and GOM are greedy. Its just a matter of who are we going to use until LL has a hopefully better system in place, or we have another option.

IGE does not "eat" the 2.9%, it is factored in when the set the sell price. GOM just shows you the fee upfront. They don't make money off of your deposits.

You put words in my mouth.

I never said "it's never worth it".
i just caught on to the fact that someone was
probably overlooking that extra fee.

When you can sell on IGE for about 11 cents
more than GOM (depending on exact price)
then it would be worth it at that time.

Gabrielle

I usually find that too conduct Arbitrage between GOM and IGE you need a 10 cent difference.

The difference between price fixing and stabilization: the first has to do with commodities, the second has to do with the currency that buys those commodities.

I right offhand cannot think of an instance in which currency stabilization has been tried, simply for the reason that (as one user pointed out) people in general are greedy, and the money-folk exceptionally so. They haven't wanted a stabilized economy because that doesn't offer them the opportunity to earn large amounts of cash without working for it. So all throughout history, it's been pretty much open combat in the financial area.

Here's something I would like to see (although I know most folks here wouldn't). Since GOM is apparently doomed the moment LL opens in-game L$ sales (unless of course, LL seriously drops the ball, which is a possibility). So I'd like to see GOM, just for the sake of experimentation, try establishing a stable-L$ rate and see what happens. Will the concept succeed or fail? Even if it fails, I don't see it can do more damage to GOM than what is about to transpire under the current situation.