What if... the Linden dropped to 400 to the USD?

Some forum regulars repeat predictions of doom and gloom about the falling Linden.
Others refute their predictions, while yet others point out that as consumers a falling Linden would actually make the game better from their point of view.

How would a drastically falling Linden affect you?

You left out the most important option:

"Raise prices to adjust for the inflation and carry on."

That's what happens in economies. If the value of currency goes down, the price of things go up.

I don't do this.. It takes a lot of time to adjust for it, and I doubt many people do.

However, I use my L$ profits to pay my rent, which I believe is caculated based upon the L$/USD exchange rate. So I would probably have to shut up shop.

Only if there is incentive (ie: Economic Loss) to force people
to raise prices.. Except in SL, the widgets people sell cost them
nothing to produce. So they will not incur a loss if valuation of
the Linden Dollar declines..


Yes there is inflation, but due to the economic structure of SL,
nobody sees it because the naysayers are looking for price
increases which will never materialize... We need to be looking
at the available Money Supply which LL keeps under lock and key
because they know such knowledge would only confirm my rants
that SL has a glut of Linden Dollars in float.

Theres one of the deflation loonies now!

Depends on how you make your money. Not everyone makes it by selling widgets as such (I love saying that word, it sounds cool... widget widget widget)... If the Linden dropped dramatically, I would increase what I charge for a build accordingly. For me, the production cost is my time, and there's a certain value I attach to that.

There is one of the radical socialist who believes an unlimited
amount of free Linden Dollar welfare checks will be just fine
for the SL Economy.

But everybody else who doesn't keep tabs on the exchange
rate wouldn't know about the valuation change, nor would they
care because their cost basis is still zero.

They might get less USDs for their Lindens in they sell them.
But what incentive do they have to raise prices if every linden
dollar they earn is pure profit?

You still haven't shown me where its welfare socialist division. Considering my premium pays for them. And no, sourse doesn't matter, because I -paid- either way.

If you "paid for them", you've be buying them off the Spot Market.
But you don't. Your $72/yr goes to paying Linden Lab staffers to
drink starbucks and show up to work in Che T-Shirts and flipflops.

The L$500 is a arbitrary amount LL has decided to pour into the
economy with the attempt to encourge trade. And I'm sure it does
exactly that. The problem is more L$ is being poured in than getting
taken out. The result is more L$ for sale on LindenX which leads to
declining valuations.

Price increases which will never materialize? That's pretty funny, considering I know several large scale retailers who have done exactly that for that reason. I imagine that anybody who is depending on SL for their income will raise their prices to adjust.

Ahem, note the not caring about source. Your opinion on me 'paying for them only off the lindex' is irrelivant. Its part of the premium package. That I pay for.

I paid for them.

Darn it Jonas, you are tenacious

There wasn't an option for me because I *would* adjust pricing.

As long as there is an exchange rate to USD, whatever the number, I can set my prices accordingly.

I'm not affected at all, unless you consider updating my prices once in a while as being affected.

I could care less about inflation in SL! I have no regular source of income besides my "welfare check" of 500 L$. If in need Lindens I buy them! I still pay Linden Labs less than one night out on the town or in other words very little. I own my own land and dont need to have income to afford it. Why should I care one way or another?

Because I'm RIGHT Reserve. I paid for it, its not welfare. REGARDLESS of wher eit comes from.

agrees wholehartedly, for the price of a six pack of beer, i can buy just about anything i want in sl.

Jonas... if the stipend was removed, but the price of a premium account was reduced to reflect that loss of value, would you be ok with that? Would you be happy to buy the Lindens you needed, even it it was only replacing the stipend you used to have, and the reduced fee meant it kinda panned out the same? How would other people feel?
Personally, any reduction if fixed cost is a good thing, it allows me more flexibity. If I need $L, I'll earn $L, if I can't earn $L, I'll buy $L, and if I can't afford $L, I can choose to spend nothing and not be tied to paying for $L500 that week and enjoy the lower fixed cost.

That would be fine Fade, or another alternative:

each month a premium acocunt has 7.00$ US bought off the lindex. This is broken into 4 payments. 7 $ is a middleground between monthly and the 'discount' annual.

There would have to be more Linden money drops regardless as the stipends set off the sinks of fees paid in lindens to LL for certian services. Uploads formost, but alsoadvertising fees, listing, etc.

Edit: the only oens who may have an issue with that system (or my other suggestion) would be the FICs who paid 200+ for a lifetime account with a guaranteed 500L a week.

I thought it would be fine Jonas
You simply (and totally rationally) want the deal that was sold to you. Deal changes, then they better renogiate. Pretty business-like really... and nothing to do with 'welfare'. Not a sense of entitlement, but a commercial expectation that an agreed trade would be honoured.
I wonder though... people aren't always rational about their consumer choices... even if they were paying no more than before, some may be put off by directly buying Lindens... because it will remind them that they are, in fact, paying for everything. The cosmetic 'veneer' of providing $L with your premium and charging more for that premium may cushion the blow for many. Your suggestion would probably address that.

They really could get more creative with sinks. A while back, FlipperPA had some excellent suggestions re: vanity taxes, and I always thought, since the current group structure is a poor business vehicle, why not retain groups as a social thing, keep the cost of forming it at an affordable-for those-not-out-to-make-money at $L100, give us some kind of realistic business structure to work with, and slug us more for it.

I wouldn't mind shelling out 250L$ or so for starting a business group with better business tools. Especially if they were seperate from normal groups..so you could ahve your 15 social and the group for managers..dancers..hosts..etc, all be seperate from that.

edit: I say this because I am looking into making a business once our new land is up (after the wedding). I'm making a small shop there.

Apologies Desmond.

Anyone wondering which option to pick in this situation, I can only suggest imagining the impact on your business after changing your prices...
... will it leave you more or less unaffected, will it hurt your attempts to cover tier or will it seriously affect your RL income.

Or will it force you to sell off members of your family

Ah, never a need to apologise

I chose 'unaffected', even though I do heavily use $L to USD conversion to support tier and expand.

I have yet to cash out even a single penny; I expect to be all about growth for the next forseeable two years or so.

It was either build a content business and a small nation-state of sims in Second Life, or continue to play Lineage II and become a level 60+ Silver Ranger Elf over the same time period.

Second Life was the cheaper, lower effort option...

I couldn't care less about the L$ value, aside from a passing curiosity in the future of this "economy". I don't have any L$, and I don't really need them. I rely on an engineering degree and 5 years of experience to make a living, not this silly monopoly money. I do make a fair bit of cash in SL but I don't take funny money as payment. USD, GBP or euros.
Anshe also takes real money as payment for land. In the long term, SL should very well have built-in support for real transactions. The web doesn't usually use its own currency, and only the very cheapest items should need to be sold for lindenbucks.