"Help!! I've Fallen and Can't Get Up" Cries L$

Its true, the L$ has taken a fall and cannot get up!! Its fallen now to L$274 / $1 USD. Of course the ostriches with their heads in the sand will declare that this is not a significant fluctation yada yada, the real business folks know that this is having a significant impact on business.

How low can the L$ go? Will its bleeding soon stop? Won't somebody DO something?!

Where is the LindeX Reserve Board when you need it!!!

Calm down.
/130/3f/83168/1.html

Good news for buyers.

Jamie Bergman? Yeah, she used to be a big time business person in SL. Now... she's apparently living on the street, begging for handouts on the doorsteps in Neualtenburg.

Sad, sad story.

P2

Oh for Pete's sake, it's been at 274 several times before (yes, even since the inception of LindeX). Jaimie you're really reaching now. This is nothing new, nor is the drama factor associated with it. When it REALLY plunges call me.

okay --see now what you've done is force me to build a little area with snowcovered boxes and hobo fires in Neualtenburg.

May I help build a rigged 3-card monty table?

You nailed it. The L$ drop ruined me.

Please send all alms directly to me so that I can buy some decent, washed clothes

get back to work, woman --don't you know there's schnitzel to cook?

no let's save that for our new Sim based on Newark.

We're working on it. We have an economist doing some consulting for us now. Once she's had time to do some analysis, we'll likely convene a meeting to evaluate where the L$ is trading, and what actions if any LL should take.

Cheers,
Lawrence

<- Warned at october.11-29-2005, 02:34 PM Kazanture Aleixandre wrote:
--------------------------------------------------------------------------------

You cant use any common economy model or theory to explain SL economy.
SL economy has over 400% cumulative yearly inflation according to today's data.
Yes u can try to model it. IMF has done in Argentina. And ofcourse didnt work. You need immediate solutions.
Sell lands(islands and auctions) using $L not usd. This is the solution. And find 2 good economists for linden lab.


11-29-2005, 02:47 PM Kazanture Aleixandre wrote:

linden lab will lose nothing

--------------------------------------------------------------------------------

linden lab will lose nothing if they use a "SL Federal Reserve Bank" system. You will buy lands from them using $Ls they will collect them in "SL Federal Reserve Bank" and "SL Federal Reserve Bank" will be able to sell $Ls to people. Actually after a time you will also buy $L s from "SL Federal Reserve Bank".
I mean, if they have economists, they will tell them how it works. Lindens will lose nothing they can sell lands using $Ls not usds. At last no difference between them. But they need "SL Federal Reserve Bank" system as i said. only for buying and selling $Ls. AND they must not put extra $L into the "SL Federal Reserve"


11-29-2005, 02:07 PM Kazanture Aleixandre wrote:
Dont afraid creating a real economy in sl. if u do these steps. sl will save you and players both. Because it has strong dynamics. Like foreign currency income. And a dynamic stuff selling economy.
Kazanture Aleixandre

... preferably full perms.

Its now down to L$275 per $1 USD.

How LOW will it go?!

F.u.d.

I would say at the very least, the L$ should slide till premium accounts are no longer perpetual motion machines so to speak.

500L$/Week x 52 = 26000$L

72$/yr Premium Acc x 274 = 19728$L

Which puts the equilibrium value at:
L$26,000/$72 = L$361/US$

Give the rate a 10% risk-premium, and let's call it market-neutral target price of L$325/US$.

Ricky, every time a discussion about the exchange rate of the L$ crops up, you or someone else presents this formula as a kind simple fact that describes an "obvious" exchange rate.

Every time this happens, some other residents point out that a market price of an item (or a share or a currency) is not determined by the cheapest price this item is available somewhere. If that were true, the "true" value of the L$ were 0 US$. (Basic accounts get a small stipend for "nothing".)

While the calculation is in no way wrong, the interpretation is. The exchange rate is determined by supply and demand. What we are seeing these days is a strong supply side: Lots of big players in the land market cashing out their L$ holdings because they need the US$ for buying sims at wholesale. Anshe for example spent some 70k US$ lately. I am sure she needs to get some of this out again. We are talking about more than 19 Million L$!

Your constant public insistence of a kind of obvious target at 320 - 350 makes me wonder, if there is a futures market for the L$ somewhere.

Just joking.

Well I spend my weekly stipends (500L) on downloads alone so the equation doesn't work for me at least. I strongly believe the L will rebound back up very soon. Now would be a great time to buy and go shopping.

Sorry, I wish I could tell you this problem would be short term and related to L$ sale from us. But it is not. The past weeks we did not sell more L$ than usual.

My suggestion would be to remove stipends from alt accounts. That would kill the farming problem.

Hi Anshe. Sorry, if I expressed myself in a way that lead to misunderstandings. (At least) I did not say, that it was short term - it isn't - or that it was your selling of L$ that caused it in the past.

But what I am sure of, is that we can see competitors of yours trying to convert their L$ holdings to US$. I enjoyed watching the LindeX on the side at my office in the last days. And what was clearly visible were huge blocks of L$ (sometimes one or two offers summing up to a million or more) coming in at one or two points below current market. Such a behaviour only makes sense when someone wants to cash out fast (really, really wants/needs the money).

With regard to your business: No offense intended, but either you will accept pumping more and more fresh US$ into SL or there will come a time, when you have to sell your L$, too. Your holdings (and hopefully your business volume) grew. So will the volume of your L$ sales. And then they are on the market - if only for reinvestment in new land.

Dear Linden Government:

The Second Life Reserve Bank Division recommends that you back the
L$inden Dollar with Gold. Doing this will guarantee a base value for the
currency used in-world.

Should the L$ decline below its base value, it can be exchanged for
Real World Gold, allowing market forces to push the valuation back above
its base value. If your target is L$1000=US$4.00, then your formula would be:

(Currency Float / 1000) * 4 / GoldSpotPrice = Troy Ounces of Gold to Own

The more currency you float, the more Gold you must purchase/own.
Anything less than a Gold Standard Model puts the valuation of the
L$inden Dollar into the hands of the General Population. Making the
L$inden Dollar a Fiat Currency and subject to the Ups and Downs of the
Currency Market and the overall economic health of the SL.

Dear folks at Linden Labs,

Keep doing what you are doing!

The market is active, reacts quickly to market pressures, and nobody is ever forced to make a transaction.

Incidentally, since it is 'good times' for the buyers of $L, it helps my customers choose to do business with me and all the other merchants in Second Life.

Warm Regards,

Can someone explain what the farming problem is?

Suppose you somehow manage to get 10 free accounts - that's 2000L in stipend per month. If 1000 people do that, it's still only 2mil lindens per month - half of what Lindex moves every day.

Aren't the dwell payments a much bigger money generator?

I make much less on dwell than on stipend, and I actually have events from time to time.

The real problem was nailed above; land wholesales for US dollars but retails for Lindens, so the real estate brokers have to convert Lindens to US dollars.

This is not technically inflation, since no new Lindens are added to the system, but it is a reflection of the demand for US dollars and the lack of demand for Linden dollars.

New Linden dollars are created by stipends (and yes, also dwell). They are only removed from the system when they go back to Linden Labs as upload fees or land payments or ad purchases. That is it. If New Lindens are more than Removed Lindens, you get inflation.

Now someone who can do math add all that up and see how it comes out. If there is more in putting than out taking, Linden Labs needs to sell land for Linden dollars.