Stabilization Of L$

Surina, I think that I and others throughout this thread have mentioned that $4/1000 is a fair exchange rate. That's the average that L$ have been at for almost an entire year.. and it worked fine.

Well, deosn't it mean anything that people have voted with their wallets and feel that $3.40 - $3.50 is the current value? If L$ are truely worth $4/1000 as you sugest then buy now while they're cheap...


*Disclaimer, I'd love to see the L$ go back up to $4, simply so that my personal savings increase in value. However as IGE and AC adjust their prices to match GOM it's a pretty strong indicator that "market forces know best".

And interesting statement Hiro... but comes across as personal opinion. WHY do you believe this? How about a challenge: you present me a scenario or three on how set prices will be "circumvented" and let's see if I can show you why that will be unlikely to happen.

Again I will repeat: the concept of "Open Market" does not apply to CURRENCY. It applies to goods that are purchased with currency. All that GOM is doing in declaring L$ to be an "open market" is to subvert the value of the L$ and make the whole economic foundation of SL unstable. It makes it difficult for merchants and landowners to do business. Example: A merchant is setting prices. 100L? No, because the L$ is destabilizing, so maybe I need to charge 200L instead. Another example: landlord tells his tennant "I will only accept payment by PayPal now, because L$ sales no longer meet sim fees." These things are ALREADY happening because of "open market".

Applying the concept of "open market" to currency is bad for everyone. It's bad for sellers and landlords because they can't figure out a fair, stable price to charge their clients. It's bad for clients because as the L$ devaluates, prices in general will start to climb to meet the offset, and history shows that once prices climb, it's very difficult to pull them back down. (remember peanut butter, coffee, honey? They used to be low-cost items. The prices were artifically jacked up and now we pay through the nose for them).

I have read in this forum about every claim there is praising the concept of supposed "open market"... and not one of those claims have stood up to examination, close scrutiny or future projection.

The only thing "open market" does when applied to currency is put power in the hands of the major L$ holders and removes it from the regular folks. It's pretty obvious that the current L$ decline is fostered not by the average merchant, but by one or two major players who have been dumping L$ on the market.

The bottom line: the system is "open market" now... and it's failing. Considering that fact, I don't see why people are so ready to defend it rather than try to do something different. Amazing. It's like the people on the Titanic going down with a sinking ship and praising its unsinkable greatness rather than boarding a lifeboat.

Or on the other hand, the reality is that both IGE and AC are forced to follow GOM trends whether they want to or not. Again, the responsibility falls back in the lap of GOM.

That is an easy one, E-Bay. People will sell on e-bay for a lower cost knowing that they are the cheaper way, people will use them instead. Or instead of selling at the same price as IGE, maybe AC will sell at a slightly lower cost to increase business, then IGE follows and undercuts AC, repeat.



Is not currency a good? The USD, the Euro, the Yen are all traded on a open market, so why not the L$?



What has caused this is not the exchange open market, but the goods open market. If the price was fixed, the all that would mean is the sellers and landlords would be undercutting eachother to get business. In the end, the same effect would be happening.




Why would the major holders want to make the goods that they hold, the L$, have less value? From what I have seen it is the smaller seller that wants to dump a few L$ quickly that will undercut the larger blocks and thus cause the market to go down.

I see the open market not failing, it is showing what the true value of the L$ is, and it has gotten Linden Labs to start making economic changes to add the value back to the L$.

Again this concept of "voting with their wallets" and "this is all they're willing to pay.

People will pay the lowest price they can get, period. Has nothing to do with what they're WILLING to pay. If L$ went up to $4 tomorrow, people would still buy them. If they went down to $2 tomorrow, people would still buy them. Would that mean that $4 or $2 is all that they're WILLING to pay? No... it means that is the current price of L$ and like coffee and gasoline, folks will pay it.

How do I know this? Because despite GOM, that's the way I work. I still have clients buying L$ from me at $4/1000 because they know my service is fast and far easier to use than GOM. (And yes, I've gone back to bypassing GOM and selling L$ directly).

Just think about it folks. A scenario:

Tomorrow, GOM declares all L$ purchases stabilized at $4/1000. All L$ sales would be at $3.90 with GOM taking a 1% commission on all sales. Will IGE or AC be able to undersell them? Maybe for a short period-- until they run out of L$. And run out they will, because folks won't sell to IGE for $3.50 when GOM is offering $3.90.

In addition, the L$ that IGE already has they have purchased at higher prices. For them to accept less, they would have to take a loss. And why should they do that, when they themselves can go to GOM and sell at $3.90/1000?

So such stockpile will vanish within just a short time, whereas GOM will have an almost unlimited supply. Eventually, the market will balance out and everyone on SL will know that they can go to GOM and buy L$ for $4/1000. Period. If they need to sell, they'll get ~3.90 / 1000. Now how can someone circumvent that? I'd like to read a feasible circumvention scenario.

But as long as GOM allows major L$ holders to dump L$ on the market at lowball prices, the market will remain unstable and under the control of just a few, "ultra-rich" people. The buyers think they're getting a really good deal because L$ don't cost as much-- but they don't realize that in the long run, it will hurt them as merchants raise their prices to offset the conversion decline. This will especially be true in land rental and merchant booth rent. And the sad thing is, they won't even realize they're being duped by the rich and powerful and suckered into a trap in which prices all over SL will be forced to raise-- and stay there.

So again, anyone that can present a logical, feasible scenario in which a stabilized L$ system can be circumvented, let's discuss it.

I love the way you contradict yourself.

OK, I just had to answer this because, well, seems that these things have already been discussed and some folks just don't get it.



This has already been challenged and met. Individuals may go on Ebay and sell for less. But their L$ supplies are VERY limited. They may sell today, but they won't be there tomorrow. And folks who want L$ now, from a reliable source, are going to forget the Ebay route and buy at a consistent, reputable dealer with an unlimited supply of L$.



Because I think it's pretty durn obvious our world economy is failing. How much are you paying for gasoline right now? How much are we paying for groceries compared to 10 years ago? Why is it that now TWO people have to hold down full time jobs to pay for what one person used to be able to accomplish? Do you folks really want SL to be nothing more than a reflection of RL failures? Myself, I tend to expect more out of SL. Why come to SL and make the same boneheaded mistakes mankind has made in RL?




And THAT is what open market is about. No matter what economic scenario you have, competitors are always going to compete. But they shouldn't be forced to raise or lower their prices according to the whims of Land Barons who suddenly decide to dump millions of L$ on the market at cut-throat prices.




Are you serious? All a person has to do is visit the GOM site to find out that the real lowball prices are in the massive L$ sales area, not in the smaller sales.



Well, if that's what you see, that's what you see. LOL. But "true value of the L$". What, and $4 / 1000 since last November wasn't "true value"? Nah, this has nothing to do with the client-perceived value of the L$. It has to do with high-rollers dumping L$. People have been asking me why they're doing this. Well, there are a couple of reasons that I can think of:

1) It's their surplus. They have far more L$ than they know what to do with, so they don't mind undercutting everyone else, because it will mean US$ in their bank instead of L$, even if they have to sell low. In other words, they don't care about smaller L$ holders or what it will mean to SL economy in general-- they're going for the MONEY!

2) But they don't really have to worry about what it does to the L$ economy, because they know that selling L$ so low will force land renters and merchants to increase their prices, which thus increases their own rental values, and over the long run, their selling L$ low will cause prices everywhere to raise. To them, it's a win/win situation.

Question: but won't this mean there will be a glut of L$ on the market and so prices will go down as merchants compete for L$?
Answer: No, because LL already has L$ "sinks" in place that pull extra L$ from the market, and they adjust those sinks according to the current economy. In addition, some merchants will simply stop selling as the L$ drops so low it's no longer worth their time and effort. (I have seen this happen with me own eyes).

In all of this, all a person has to do is drop pre-conceived notions and follow the path through to a logical end to see the most likely outcome.

I have to agree that the big sellers(and little sellers) are pushing the prices south. But I'm concerned with a change. Here's why...

When I want to sell my $L fast, I click on the sell now and sell it for less than I can get if I set my $L for sale at a price below all others. I know it's a few pennies per 1000L, but it's fun, and by so doing I am undercutting the big sellers thereby, jumping past them in line to sell next. Yes, that will drive the market lower if others do the same(they do).

If we force a set price, the sales would go according to "first come, first serve". If you list L for sale, all L listed before you must sell before your L can sell. Then the big sellers would still flood the market, but the little guy would have to wait till all the big guy's L is sold before being able to sell.

I hope LL comes up with a nice way for buyers to buy L directly from those who are selling goods and services within SL. Although I realize it will harm those who

And I love the way you make generalized statements without any explanation regarding the claim.

There is no contradiction. When I said that people would buy at the lowest price they could get, I would hope it would be obvious I was speaking of people in general.

That doesn't mean there isn't anyone willing to pay higher prices-- and that was the entire point of the post... ie, that the $3.50 price on GOM right now isn't "all that people are willing to pay for L$". They'll pay the current price posted on GOM... putting the responsibility in the lap of GOM for the way it handles L$ sales.

Yeah, you make a good point. I've thought about this a bit. Here is just one of several ways that this might be overcome:

* Instead of a "first come first serve" basis, make selling L$ a random event. Pick a seller at random, fill the buyer's order.

That would be an easy fix. While there are others that would work as well, I think this one would be the easiest to implement, most equitable and most fair. I would guess that this is likely one of the methods GOM uses to fill some buy orders.

You would guess? ROFL Why don't you ask?

OK Surina. What are you into now, the "let's attack the other user" phase? Gimme a break. If you have a point to make, make it. Otherwise, less snide.

The problem I see here is, the big sellers will have so many more orders to sell, their listings are more likely to sell first. It's like the lotto, if you buy 10,000 tickets, you are much more likely to win than the guy with one ticket, even tho only one will win.

If I list 100 seperate listings of $L5000, and you have only one listing for $L5000, then your chances of selling is smoothered by my 100 listings.

If we only allow one listing per person, large sellers will be negatively affected.

I guess I "don't get it" because I disagree with you. If I had a steady income of L$ and I wanted my money now, I would just open my own exchange. Then I can set the price to the level that I want, and if I have too many L$ sitting around, I will sell then for less. IGE and AC do the same thing. If everyone set the price to the same amount, and then because of the higher price there would be a smaller volume of trading. This will cause more L$ to be sold into GOM, IGE and AC then is being sold out of these places. That means the net income for these companies will be negitive, and I know of no business that can lose money and stay around.

Orders filled by the 'buy now' or 'sell now' buttons on GOM are processed stictly in first in, first out order.

If a retailer wishes to cash out 300k and presses the 'sell now' button the orders in the wanted list are filled sequentially in a top down manner untill all the 300k are sold. If there are less than 300k in the top price bracket, then orders from the next bracket down are filled, again in date order.

The same applies to the 'buy now' button and the "for sale" list.

There is no random picking of which orders to fill.

Yeah, that's true, but each individual listing has the same chance of selling as even the 1-order person... and with the quantity of L$ bought/sold each day, it wouldn't take long I think for any order to be sold. Another thing is that large order folks are going to be unlikely to spend all the time placing 100 individual sell orders. GOM could actually build in a preference system to take care of such problems.


For example, as a safeguard, a "kicker" could be added that any sell order still unsold after 4 days would be bumped to a priority list which would be given say, a 50% better chance of selling than new orders... and after 1 week, a "sell now" status.

No system is perfect, but I think that would work.

OK, here's where the "think it through to logical conclusion" comes in handy. The question: Are Ebay L$ sales a real potential threat?

Say you have 100,000 L$ sitting around, and you want to sell them. You're thinking about selling them on Ebay. But then it hits you, "Why should I sell them for $3.50/1000 on Ebay, when I can go to GOM and sell them for $3.90?"

The only person who might be tempted to do so would have to fill two qualifications:
1) They'd have to have a LOT of L$ to make any difference
2) They'd have to be desperate for cash NOW.

Otherwise, selling on Ebay would qualify for being

3) A certifiable loon.

So that's why the Ebay sales concept would not be a considerable threat. No one is going to sell on Ebay when they can get more on a revamped GOM.

Actually, you sure of this?

According to GOM, when a seller places a "sell now" order, GOM fills it with the "best available prices" at the time. This doesn't indicate a FIFO method, but a search through buyers for best available buy prices. While that doesn't indicate random processing, it does indicate some internal massaging of data to make the system work.

Similar massaging could be done on a set-price system. In fact, managing a set-price system is even easier, because one doesn't have to worry at all about fluxuating value variables. All they have to worry about is giving everyone as fair a share as possible.

The inherent problem of course, is that there are more sellers than there are buyers. In such a case, the market may be stagnant for a few days while more buyers cue up. But it's equally possible that there could be more buyers than sellers, which is great for sellers and buyers will have to wait a couple of days until more sellers show up. In addition, LL can keep a close pulse on things and if there starts to become a shortage of L$ available to buy, they can place more into the system, or vice versa, they can use sinks to pull an overage and create a greater buyer market. That's the beauty of the system; it can be immediately altered to suit current needs, while retaining a consistent value level so that commerce can be conducted properly... and so that commodities themselves will influence supply-demand rather than an unstable L$ adding to the confusion.

I am just curious how many of you actually trade in RL markets?

Cause all the bitching you are doing about the current GOM system is moot. This is how RL markets work.

Orders at the top ask and low bid are filled first.

You are (almost) allow to list how ever many "shares" you want at any time, you can also place unlimited orders in RL markets. HOWEVER

They have rules, regulators, whereas GOM does not.

I.E. 10 mil shares outstanding, you come in and try to sell 9 mil of those. BZZZZT wrong.

Unless you filled beforehand with the SEC you are going to RL jail.

So the fundemental problem that GOM is only suffering from is regulation, or its lack of an SEC watchdog.

Otherwise, all this postulating on how this is broken, and that is broken, is, well, like I said, moot.

Go read some books on day trading/market investments please.

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks arrogantly telling others to go read books. There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less explosive?

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks arrogantly telling others to go read books. There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less volatile?

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks arrogantly telling others to go read books. There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less volatile?

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks arrogantly telling others to go read books. There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less explosive?

Y'know Alexander, that is a pretty durn BIG fundamental. Take the "rules" away from the stock market, and the whole thing blows up. The big cats win and the little guy goes bankrupt. You say that is the "only" thing GOM is suffering from, lack of regulation. That's a pretty big ONLY, isn't it?

Just for the record, I'm tired of folks arrogantly telling others to go read books. There are others out here who know how the system works, just like you. Why, some of us have even gone to COLLEGE! *GASP* So please, give us a break.

I'm somewhat amused by folks who point to the stock market as a guide for conducting business on SL. As far as I can see, throughout history the stock market has been one of the most unstable, volatile, unequitable systems I have ever witnessed. It's basically a way for the power brokers to become richer and it is so full of potential abuses that the Fed has to have all kinds of rules in place to even keep it marginally legal... and even then people abuse the system.

Do we really want SL to be modeled after such a system?

Or would it be better if we tried something a little different, a little more equitable, a little less prone to abuse?