End the Stipends....just a thought..

They inject new printed money into the SL economy for two reasons, to keep the exchange rate stable and to make money. Their only "accountability" is to keep the exchange rate from inflating too rapidly.

Wow I never thought about it like that, where did you get that ingenious insight into the SL economy!

*runs away sobbing and slamming her room door*

Its not fair! None of you understand me!!!

Well infact if LL does inject L$ into the economy anytime they feel like it, then I would think it has to stop, and let the market find its spot on its own, there is far too much money invested in SL for anyone to be playing market controller

Somewhat, yes. But L$ can be created out of thin air (yes, they do that) and USD cannot.

Also, I don't think they should get rid of stipends. LL chooses not to allocate enough resources to customer support. SL is one of the next big things. They could get A LOT of financing if they wanted. But that would dilute their principal investors, so they may be hesitant to do so. LL needs to get a new round of financing if it expects to be able to support itself (IMO).

Hi Jax! FYI, LL printed and sold 223,000,000L in March. They sell L$ now to keep the FX rate stable. The L$ is strengthening right now. And the FX rate would be lower without LL printing new money and selling it. But think about when the L$ starts to weaken against the USD. Does anyone really think LL will buy L$ back in order to keep the rate stable then? I seriously doubt it...

If they stopped injecting new money the exchange rate would spiral out of control. Lindens would become more and more scarce as the population grew. I was quite a detractor when I first heard that LL was planning on selling lindens directly, but the exchange rate has been incredibly stable since they started doing this.

Go to the market data page for the lindex and click on all. The exchange has been flat and stable for something like 8 months, nothing like the roller coaster before they sold lindens directly.

When you or I buy L$ we buy them from other residents, or Supply Linden. They are interchangeable to us, NOT to LL, they print the money! They do NOT buy a single L$!

Look at the economic stats, Supply Linden sold 190million L$ but didn't buy a single one. If you think they don't print this money, I'd like you to explain to me where it came from.

Its simple math my friend, all Linden Labs L$ activity is laid out, right there on that page. EVERY single L$ they received and spent. There is no ghost money there from US$ land sales or anything. They simply handed out 300 million more L$ than they received. There is no trickery or smoke and mirros. They just make it and it goes out in two major areas, Supply Linden L$ sales on the LindeX that they generate US$ from and out to stipends. Supplly Linden keeps the L$/US$ exchange steady, as it has been at the same spot for months now. Without the stabalizing factor of the Supply Linden L$ sales the cost of L$ would have steadily risen.

Here are a couple of stats to chew on:

Total L$ inworld

Feb. 20, 2007 - L$1.813 Billion
Mar. 20, 2007 - L$1.941 Billion
May. 01, 2007 - L$2.513 Billion

I don't think suspending stipends will do anything to improve development or maintainenace of SL. If they were to be done away with, it wouldn't really make a difference to me. They are a nicetie, but it would mean one less pair of shoes bought each week.

point well taken Rock

but (and you know what but means) lol
I think that there is enough interested parties in the Lindex to keep the market pretty stable. remember there has got to be a good 20000 people watching the lindex for the slightest change, and they are going to jump on any opportunity that might appear, and they will quickly curb its rise or fall. I know I will , if the market falls sharply of rises sharply Im going to make some money. But on the same token, my profit equalizes out the market just a little

You really need to think through your arguments.

You think the Federal Rerserve should stay the hell out of the US economy and let it 'find its spot' too. Ya you don't need a stabalizing factor in any economy, no siree.

They never did before - Their approach is to tighten supply and wait it out.

If they get rid of stipends two things will almost certainly happen:

1) Fewer people will go premium. It just makes no sense to be a premium member without stipends. If they want land, they will rent from land barons.
2) Supply Linden will simply create more lindens and sell them. The overall net increase in lindens will not differ substantially.

It will not solve any problem that you think you percieve.

Thats all fine and dandy with a stable population. What happens when we have twice as many resident as we have now, but no more money in the economy? Well L$ would cost twice as much since there is twice the demand for them (obviously simpllified but you get my point). This is why LL HAS to print more money on a monthly basis.

I dont have any arguement, it was just a thought on trhe supply of L$ and how it could better be used.

Oh and also , the market if it is the way you say has been stable for 8 months.. well 8 jmonths ago ther was roughly 500,000 registed users, theres a conciderable anmount more now, and I bet the percentage of investors has risen in that increase of registered users even more, I dont think Lindex would need any stablization, the investors could keep it stable

Ya they wouldn't have to buy any back, just tighen what they sell. With about 200 million being sold, they can make a decent dent by reining in that amount.

Linden Labs is collecting money all the time from tier fees being changed from L$ to USD all the way to land auctions being sold in L$. I dont see the taboo in LL using Lindex itself to exchange USD to L$.

There is plenty of money being collected to justify the 300 million L$ handed out as stipend

Umm you are missing the point, where do the investiors get thier L$?

Thats right. Printed money. If there is not enough money to go around, the new investors, and their demand for L$ will simply inflate the price of the L$.

Your faith in the will of the people to control the exchange rate is misplaced. If there is not enough money, the cost will rise. Simple supply and demand. Investors can not stabalize an exchange, by simple definition they are an unstabalizing factor in an econopmy with a tight money supply, and your point that there are considerably more of them drives that point home even more.

If there is a finite number of linens in SL and an ever growing population, the exchange rate for lindens will not remain stable. This is one of the most elementary ideas in economics: Supply and Demand.

Besides the 'investors' wouldn't react to stabilize the linden exchange. Most likely, people would hoard lindens hoping to profit from a skyrocketing exchange rate.

Remember there are only 30,000 premium accounts left inworld anyway out of 6million residents.
So the amounts of money concerned in this idea are peanuts, they can take my $2US stipend away if they drop my premium fee by$2US if that helps?
LL can print money basically but no doubt they realise they have to be careful about it and judging by how stable the $L has been in last 6 months of enormous growth, thay have been handling it well.
I wonder what happens to mainland prices & rents etc when there are only a dozen premiums left that can own 3 continents?

In every world economy, and L$ would be considered a economy, supply and demand is one of the stablizing factors, another stablizing factor is investors and prospectors, and there certianly is not a shortage of either one of those types of residents in SL.

As of right now things are geared "small time" as huge as the L$ economy may seem right now, it can be 100x as big as the population grows and new avenues come availible for LL or other 3rd party institutions to charge L$ for differnt services.

I read on another post, and I dont know where the legitimacy of the OP came from but there was talk of LL to implement charges for land sale listings, this is just a illustration of more possible avenues for LL to increase their L$ collection routes

AS long as people keep buying L$ there is no "finite" amount of L$ in the the economy
and
AS long as ther is profit to be made on the Lindex, investors are going to take advantage of it, so therefore hording isnt going to happen

LL does not buy L$. All L$ sold on LindeX are sold to other residents, so LL has nothing to do with L$ being changed to US$ to pay tier.

The money they do collect in LindeX fees is US$.

Have you actually looked at the stats I'm refering to? They collected less than L$3 million in land sales, and collected less than L$80 million total, yet handed out L$375 million, and its not L$300 million in stipends, stipends accounted for only L$150 million.

Essentially this - If LL stopped handing out stipends they would have to sell that missing L$150 million (in actuallity a bit less) on the LindeX to keep the market stable. That L$150 million would generate about US$560,000 in money for the company.

SOOOOO, in reality, to answer your original question (I don't think I have actually answered it), stopping stipends will actually help LL earn more US$ and theoretically help wwith QC problems by allowing them to hire more people. I don't tink that it would be good for the economy as a whole and would be bad PR.

Linden lab is not to my knowledge cash strapped in fact i am told its quite the opposite. They have the money to spend but are not for whatever reason. Ending stipends will only end the remaining premium member accounts which wont help linden labs much because then they will have no mainland sims to sell.

This has been talked about before except last time it was called "welfare" and people who collected it and paid for it were "freeloaders" now we are supposed to have premium holders give up what little value there is to their account?

mainland land is pretty much a bust, most premium holders have gone to estate land while the remaining ones hold onto their premium memberships because of the stipend and the possiblity of buying mainland land.

drop the stipend andm ight as well say bye bye to mainland land..

honestly cutting back on perks that keep people in the game is not the way to go..

anyhow (i feel like history is repeating itself newplayers like the stipends for uploads and other things they even pay for the stipends do we not want new premium members anymore?)

p.s. as of well about 2 days ago I am now a free account the stipend alone although I was collecting 500 lindens per month was simply not enough to keep me on the hook. My feedback to linden labs was I would go back to premium if they KEPT the stipend and made mainland land more appealing as at present its a mess, mismanaged and over priced. If however they cut the stipend and clean up the mainland there is no benefit to it as i can get similar land for a cheaper price in an estate sim.

Right and with 100X the population, what do we need? L$, about 100x as much to keep the economy stable.

Where will those L$ come from? Linden Labs.

What does LL pay for them? Nothing, printed from thin air.

Is this bad? Definalltely not, not if its done in a managed and fiscally responsible way.