Stabilization Of L$

just... can't... resist... surely those people are playing a game with their OWN income ?

I, I see. I stand corrected. By the way, is there any way to display the GOM chart with different ranges than what's given on the GOM website? Another feature I would love is being able to open up self-refreshing pages that show only a small section of the page, such as just the chart, or just the Daily Summary. It would be nice to have a constantly updated ticker on my desktop as a web component (I curently wrote a tiny HTML that references the chart's .php image, set to update every 10 minutes)

Sounds to me that what happened was the market killing off your site with, in this case, more supply than more prices. Unless GOM were to start making huge quantities of Lindens, they would no doubt reach the same fate, especially if someone else decides to cash in on the free market as well.

Not sure what you mean by "more suppoly than more prices". But my attempt (which btw, was successful... too much so) and GOM differs in one fundamental way: I was selling L$ that I myself directly earned whereas GOM facilitates transfer of L$ between one user and another. So my supply of L$ was limited; GOMs supply is virtually unlimited.

I have a C# program I wrote that pulls the last ask/last buy prices every 30seconds (easily changable to whatever duration) and graphs the results.

The only real thing is, its not a heavily trafficed market in which the prices are fluctuating every minute, so its really not worth anything other than maybe setting up alerts to let you know when a price hits a certain point.

Still, I suppose it better than hitting refresh 80 times a day.

I just deleted a long post I prepared, so blunt it would have gained me more enemies. I'm learning.

So I'll soften and precis it:
Please, dear posters, if you think there is any possibility you might be misleading others, by posting here more stridently and less tentatively than you should - stop. If your level of understanding of economic forces is too sketchy for you to lead others, pause, and read a book or two.

I certainly need to, and am doing, and my background and experience is pretty close to start with.

Easy, Rasah. Use an undocumented feature of the GOM site.

Look at this url:
"http://www.gamingopenmarket.com/priceChart.php?symbol=SLL&w=640&h=480&maxpts=500"

It gives you a custom chart, with a timescale chosen by you. Just change the final number to the number of time samples you want displayed. You can see all the way back to the beginning.

http://www.gamingopenmarket.com/priceChart.php?symbol=SLL&w=640&h=480&maxpts=500

Peak was about $6, around sep-oct 2004. When I joined and did my original investing, to my extreme misfortune. Made me look closely at the implications, and realise that it is change that causes the problems, for all business operations, and even for non-business residents. Not just a matter of individual losses, or particular values.

The reasons that disturbance itself (separate from capital losses to holders) is damaging, are powerful and genuine, but subtle and not easy to understand. I unearthed these reasons, but had to study a bit before I could see how they worked and why.

Yeah, Thats what I decided when I got my head bitten off LOL

But no matter HOW little knowledge I have on LL economy...Its doesnt take a rocket scientists to know that a vitual economy is based on ( from the stages of creation by its 'creators LL ) any RL economy..the same rules apply almost exactly

In whilst I may of got a few facts wrong about 'how' and 'where' L$ comes from...doesnt change the basics of
Supply Demand

Thats a golden rule no one can argue with...& whilst I dont really know the 'wheres & hows' it still boils down to supply & demand. We can complicate & ponder the finer details of it for a life time..



Theres SO many factors here that will no doubt effect the value of L$ and being all 'wordy & knowledgable' doesnt mean one person knows more than the other

simple facts...supply demand..

Dead right, LilyBeth. Its when people get more complicated than this that the difficulties start. Like suggesting ways to set up exchange methods that try to override supply and demand by enforcing some artificial rate. The market will always find a way to win, and will break all such efforts not based on matching supply and demand, unless they involve actual intervention, buying and selling directly. An open-ended commitment to swim against the tide, potentially consuming huge sums and risking huge losses.

The only way to control the exchange rate without intervention risk is to alter the natural supply and demand. In the short term by a confidence-changing announcement. In the longer term by altering the underlying factors, like the money supply.

Dead *semi* right. The Supply > Demand reason that the L$ is falling is the result of too much money floating in the economy per user.

Alos, you CANNOT EVER EVER EVER control demand, you may only influence demand by controlling supply.

I've heard this concept quite often when presented in light of L$. And while it seems to be true up front, I think there is something being overlooked:

In general, the concept of supply/demand does not readily lend itself to the area of currency. Supply/demand applies not to the means of barter, but the thing bartered.

Now, agreed, there are RL money markets in which currencies are bought/sold. But these have less to do with supply/demand and more to do with projections and predictions of currency flows.

The concept of supply/demand deals with commodities. Ie, the client should not have to worry about the value of the L$. The client should deal with one issue: do I want this merchandise and is it worth what I pay for it?

If the L$ itself devaluates, the whole economy suffers. If it inflates, clients stop buying because the L$ has become absurdly expensive and they simply can't afford it. Has nothing to do with supply/demand, and in truth, I don't believe that concept is valid regarding the L$ itself.

Now mind you, that is where GOM has placed the L$... as a game commodity, and that is a disservice GOM has unintentionally done the system since day one. L$ should never have been traded like a stock market. They should have been the stable constant around which all other trading is done.

All currency is traded like a stock market. Banks do not have a set exchange rate for $US to pesos, or pounds. Not to mention you don't have to go to a bank. If you go to a Mexican and ask him if he wants to give you 5 pesos for your US$1, you suddenly have exchanged a variable rate. Do you think someone else will give you US$1 for your 5 pesos just because that is the rate you set?

Supply and demand do work on currency exchange. The problem is not quite so simple as saying $L in circulation are the supply and US$ in circulation are the demand.. The way to measure supply is to look at the amount of currency people are willing to spend at each price, and for demand you look at the amount of currency people are willing to buy at each price. There are decisions that are supposed to be made by both sides to determine what they are willing to sell or buy at each price.

Every person that sells $L has a cost that can be measured in US$ that they have suffered earning their $L. For some, this cost is US$0. The cost does not have to be actual US$ they spent. Work time can be given US$ value if the person decides what value their time has. $L spent can also be converted into a US$ value. If they are intelligent, they will try to at least make back the money it cost them to get that amount of $L. Otherwise they start to pay for the right to work. Some don't care, because this is all entertainment to them. That is fine, it simply means they won't have a minimum value to their $L. If you make less US$ then you spent, you should stop doing what you are doing unless it is for entertainment. This is how the supply side should set a low mark for their money values. The amount of $L people value at each price level gives a rough shape of how many $L could probably be sold if buyers are only willing to spend that price.

Every person that buys $L has a certain value in $US they are willing to spend on $L. There are several ways a person might go about setting this value. One method a person could use is setting a budget. They may be willing to spend US$10 a month on the $L market to get extra money to spend in SL. A second method is putting US$ values to the items they want. If the person wants a 2048meter2 peice of land for 10,000, they have to decide whether they want to spend around US$35 to buy that land. This is how the demand side should be putting the high marks on their money values. The amount $L people are willing to buy at each price level should set the shape of how many $L could probably be bought if sellers were willing to meet that price.

The price level where both buyers and sellers agree on the amount that should be sold, should be the price level most of the trading occurs.

There are other international currencies that can be used as a measuring stick, and there are of course other factors beyond the ones mentioned. I am trying to explain supply and demand effecting $L as simply as I can. If you want to dive into the complexity more than this feel free.

This isnt my 'answer' as I dont have one...I am genuinly interested by different ppls views and have learnt quite a lot.
But, as I said before there 'are' many factors that contribute to the value of L$

(these are questions btw not points)

1)

I see stores that name themselves after the amout it costs them to upload the textures for creating clothes...and read the notecard saying things like " SL shouldnt be about having to remortgage your house to live a fantasy of looking good!" and you know what??? I Paid the 20L$ for that rather nice dress and thought 'cool'

Im thinking NOT so cool now.

Ive seen people who are either very financialy comfortable in RL to offer generous FREE donations of vast amounts of textures/scripts/clothes/ (usualy textures) for the 'good of the community' Or maybe for the good of their ego? I dont know. And on the face of it it looks great but Ive always claimed this kind of ' Robin Hood ' type behavour will/could/can/has/might do one day have an effect on merchants.

2)

I read a post about how some people 'make' money in SL and do not reinvest it back into SL and I thought 'wow thats me!' I am here to MAKE money..it started off as a 'make enough so I don't have to buy any' but then I got into the whole business & creation and yeah I'll admit it...my ego got involved too...(lethal!) And I am notoriously tight fisted i think? In SL...i am always looking as my costs/profits...but then I DO playing slingo everynight...and i DO buy clothes (occasionaly) and I also spend a LOT on uploading textures 4000L$ this week alone....so maybe I'm being harsh, but it DID get me thinking...if all we do is reap the rewards of our labour...and take without reinvesting at some level that will effect the value no?
Then again I thought...but if werent selling it...and flooding it back into SL (without selling it) surely THATS worse?


Forgive me...it all gets a little confusing when I think too long into it

I could talk about this forever as I find it very interesting If not a little upsetting that the hours I spend working will eventualy be worth nothing financially to me and no-body worls for nothing no matter how much they love their job. ( apart from volunteers ..im not that gracious)

Ok, first with question 1. It is hard on a person that puts value to their time to compete with those that put no value on their time. The thing about a free market is that you can do anything you want. If everyone and their brother has fun making dresses, and they have no problems with losing money in the process, that is up to them. They find entertainment where you find work. If there is too much competition in dress making to make money, then do something new. You will make more money trying to do something new, because you will be providing something for buyers that no one else is. Eventually that new thing might become all the rage to be created, then you move on. You don't assume a business will make you money, because you work. You work on a business that makes money, because people want to pay you.

Ok, with question 2. Don't worry if you do not buy $L or sell $L. You are not hurting everyone else. The thing that hurts everyone else is the fact that some people have been able to make large amounts of $L at little to no cost in $US or work. This hurts everyone else, because these people have nothing to lose from selling at cheap prices. Everyone else has real life money to lose if the prices drop too far. Supply and demand are based off of how much people overall are willing to buy and sell at different prices. If US$7 is worth less to you than the entertainment you can get by playing $L2000 in SLINGO, then don't sell the money. If US$7 is worth more to you than a $L2000 skin for your avatar, then don't buy the $L. It is your choice, you aren't hurting anyone. You are only hurting yourself if you spend the money on one side, and decide that you would of rather had it on the other side.

There are many ways to return value to SL. It doesn't always mean buying things.

My partner and I return value in several ways. We run one of the largest non-nightclub groups on SL, providing users with three enjoyable themed sims. We provide them places to live by renting them reasonably priced land.

In addition, I merchant. Yes people pay me for my wares... but they use those wares on a daily basis, adding to their enjoyment of the game.

Yes, I on occasion purchase items that strike my fancy... but with over 20,000 items in my inventory, I don't buy as much these days as I once did. People buy from me instead. I'm not leeching from the system because I reap the rewards of my efforts-- my efforts assist people in enjoying the game.

That's the role of the landlord and merchant-- providing the environment in which people play. But with L$ quickly approaching the $3/m point... the reason for merchants working hard are rapidly diminishing.

My viewpoint at this time: it's high time for GOM to bite the dust and someone take over that doesn't play games with people's incomes.

LOL, I had to laugh at this. At what precise point, in your opinion, are users qualified educationally to post their opinions here?

Truth: I've known a lot of "book readers" who were totally clueless, and a lot of secularly uneducated people who were sharper than tacks.

I have a college education. Doesn't mean a thing except that I have a piece of paper that CLAIMS I know certain things about certain areas. Nevertheless, I've known a lot of professors, 8-year degree men, who had no clue what real life is about, what it's like to run business, had no common sense, and if they didn't have tenure at some university would wind up homeless because they could not figure out how to survive in the real world.

Economists are a dime a dozen. The fact that very few of them agree with one another is pretty much proof in my book that there is more to economics than books, charts and newspaper articles. I've seen debates in which economics "experts" totally disagreed with one another in their ideas and predictions, but all of them were "learned" men, studied and degreed.

And I know for a fact, that sometimes the least educated, most under-estimated, simplistic person out there can on occasion state a truth that is able to change life as we know it.

So at what point, in your opinion, is a person not qualified to post here? Right or wrong, book-learned or not, I myself want to hear what folks have to say.

LOL

I'm INSULTED (joke)

I own Textures R Us...*cough cough* see the link below? lol

HUMPH!

I make custom textures and do 'very well' with a GREAT deal of hard work and marketing & business planning...I dont make dresses

**serious dent to my ego**

Quite right Way, (you should write a song about that...)

Actually... I have. It's called "Jester to the King".

Then keep up the good work. I think I was using dresses as the example, because you were mentioning cheap dresses.

Oh Im only teasin Dark...feel like an egomaniac now teehee

Well, I just checked the GOM. If it weren't for some [expletive deleted] megalomaniac(s) selling massive quantities of L$ at rock bottom prices, the market wouldn't be too bad. There really aren't that many lowball sellers out there... but the ones that are underselling have a lot to sell... and they apparently don't care what happens to the rest of the market.

But what really bugs me, is that GOM, instead of setting up a nice, stable, easy-to-use currency exchange system that would benefit everyone, has instead set up a system that allows these people to do exactly what they've done.

This isn't a case of the majority of people saying "All we're willing to pay for L$ is $3.50/1000". This is a case of a few unconscionable people (or maybe just one person) flooding the market with L$ and lowballing everyone else-- without a thought about the damage they do in the process. And the way GOM is set up, there are no safeguards in place to prevent such a thing.

After all this discussion, I still hold to this concept: GOM would have done better if they'd have set the price of L$ at a stable amount and simply acted as a conversion house. As it is, they have created a highly unstable market. They have set up a stock market game rather than a reliable currency exchange and have done a great disservice to the community as a result.

I do know this: unless GOM gets very smart very fast, they won't be setting the market standard for very much longer. In truth, I'd like to see 'em wise up and offer SL clients a service that is fair for everyone and that doesn't put merchants out of business. I don't want to see GOM fold. Like I said before, they're basically very nice and helpful people. I just want to see them conduct business as it should be conducted. They're not there to add another "game" to Second Life. They're there to promote economic health on SL-- something that currently, they are not doing.

I don't mean to bark at GOM; I just call 'em as I see 'em. I encourage GOM to change their structure and start working as a currency conversion house rather than some goofy play-money stock market. I think SL as a whole would do better as a result.

And what exchange rate would be acceptable for you Wayfinder?

There is no better system than an open market. If you set prices, they wil be circumvented.