PayDay Tuesday - L$ Going Down

excuse me, same thing just worded differently. It failed in the past and would never come back.... like I said before, check your SL history.

Odd, you seem to be missing rent payments. Those should be subject to inflation because the tier payments they support are in dollars. I'd ask what percentage of money spent in SL is rent versus purchases, but since you have no real data on anything economic in SL except the little that concerns $L prices, you probably couldn't really answer.

You know there's no mudflation. Mudflation is all about uncontrolled rising prices accompanied by massive influxes of cash into the system. You know that's not the case in SL. Why do you keep repeating things you know not to be true?

Let's suppose for a moment your scheme would be put in place. This charge for prims and no more stipends.


I would see prices of items in SL to quadruple. That happens no one can afford them. People recieve no income. No one has money to buy your items. Land starts being sold off, people close shops. There would be no incentive to create.

People would start changing to basic and after a short while realizing they dont need the things they used to buy. No land sales then. Temporary homes and clubs being erected in the sandboxes for social gatherings.

SL would become just another chat room. The incentives to create would be gone. No reason to buy a thing. just log in once in awhile and chat with friends.

Oh yes, the L$ would be stabilized because no one would be buying or selling them.

Is this what your scheme wishes to accomplish?

I can answer that - because the buzzphrase will panic more supporters to the 'no stipend' cause....

when I can see some actual data that the L$ *IS* worth this - and that it should be worth *THAT* and *THESE EFFECTS* have happened over time I'd give more thought to the plethora of 'economic experts'...

As it stands the statements they make are usually mired in self interest and very shallow in the facts department.

But but but.. he has the ultimate savior idea for SL! *sarcasm*

I guess if people hadn't been here, done that with the whole 'taxes' thing... they wouldn't understand how much it hindered development of anything.

And yes, the prices back then were incredibly steeper than they are now even.
Ah yes, perhaps one day we can all start seeing what SL is all about. But then, capitalists don't always see that way.

Last close: L$278 / US$1.00

The $L closed up not down. Opps if anyone fell for RBD's nonsense because they couldn't read a graph he just made a prediction and proved himself wrong.

In First Life there are some active stock market investors who have access to "The Book".

By that I mean that if I wanted to buy/sell say 5,000 Vodafone shares in the UK (epic code vod), rather than go to my broker and buy/sell the shares through him, I would write my own prices directly on the LSE via the sets book..........

In Second Life all here write their own prices for currency exchange via a type of "book".

Linden (and a few other very large players such as Ansche Chung) act as a type of market maker although only on a "matched bargain" basis to my knowledge.

Therefore scare stories posted on BBs about massive movements up or down may have a hidden agenda...........no I rescind that, that is a very naughty thought for a law abiding Avatar such as my good self......by the way is it possible to go "short" on the Linden dollar? (Evil smile)

Care you rephrase your prediction? I think you should have said L$279
instead of L$276.


Best buying rate: L$279 / US$1.00
Last trade: L$279 / US$1.00
Last close: L$278 / US$1.00
Change: +L$1 / US$1.00
Today's volume: L$785,075
Today's open: L$278 / US$1.00
Today's high: L$400 / US$1.00
Today's low: L$278 / US$1.00
Today's average: L$279.15 / US$1.00

Wonderful doom and gloom predictions of high prices forcing people
out, yet people buy land for hundreds/thousands of dollars. They purchase
private sims for $195/mo (L$55,000/mo). I don't see these high prices
forcing anybody to leave. I believe you've been using too much of your
own propaganda. Your crystal ball is flawed.

I've not mentioned anything about Taxes. I'm talking about making
a fundamental building block in SL a commodity. Giving it value, which
in turn gives all the objects created an intrinsic value higher than zero.
Which is what every objects current intrinsic value is...

This then leads to inadvertent valuation growth of the Linden Dollar
due to the demand for L$ denominated prims.

I guess you have been sleeping the last 2 years.

Sep '04: US$5.80 per L$1000
Feb '06: US$3.60 per L$1000

Explain this decline in valuation and why after nearly 2/years it has not
risen higher?

The prices reflect what the market will bear, no commodity si needed, and yes, it -is- a tax.




WOW that aside from ignore socialist propoganda..both from you. Apply BEST to you.

I don't think I need to say more than practice what you preach.

Technically, These prices reflect what the market won't bear.

I've been pondering a real world example that relates to the
SL economic system. The best example I've been able to
research is the Hyperinflation of Bolivia.

In 1985, Bolivia was unable to raise money through taxes and
such to pay its bills. What did Bolivia do? They just printed new
money. Its kind of funny, but its true. The Bolivian Govt didn't
have the cash in the bank to pay its expenses, so it just told the
currency printers to print more money. Wouldn't we all love it
if the mortgage bill, telephone, LL tier bills could be paid off by
pushing (start) on your own money machine? That is what
the Bolivians did..

So What, right? How does this apply to Second Life and the
Linden Dollar? Well let me tell you....

The Gov't of Second Life (ie: Linden Labs) doesn't have any
expenses like Bolivia did, but they are doing the same thing as
the Bolivian Govt did in 1985. They are constantly printing new
Linden Dollars in excess of the Linden Dollars they remove from
the game through various "sinks". This effect translates into a
growing glut of Linden Dollars in the economy, leading to the
similar effect of Hyper Inflation that Bolivia experienced in the 80s.

Now you have to adjust your thinking of Inflation for SL to
mean "Increasing Currency Circulation". Not the typical effect in
the real world of rising prices... You WILL NOT see land which was
once priced at L$10,000 suddenly be repriced at L$100,000. What you
will see is a reduction in valuation of the Linden Dollar as the Supply
Side grows, relative to the average US Dollar Inflows. Since supply
continues to exceed USD Inflows, the value declines.

Just to validate my notes on how an increase in the money supply
will lead to Inflation (Mudflation) in SL.. Here is an article about
Inflation Concerns related to the Fed's increase in the money supply
in prepartion for Y2K.

Source: http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=15240

Will money supply increase cause inflation?
Whether Y2K is mild or severe, monetary disruptions concern experts
By Jon E. Dougherty
© 1999 WorldNetDaily.com

The Federal Reserve's record increase in the U.S. money supply -- the largest such monetary expansion in its history -- in anticipation of Y2K-related financial problems may well lead to inflation, depending on how bad Y2K turns out to be, according to economic experts.

The expansion, while considered necessary, has nevertheless worried financial planners and money managers, forcing some to conclude that the Fed's unprecedented move has occurred in the days and weeks leading up to the new millennium because of closely held fears over the effects of the Y2K bug on U.S. financial markets.

Worse, they say, the burgeoning monetary supply -- now measured at over $194 billion -- seems to come with no traditional fears of inflation.

"The money supply has gone through the roof and the increase, adjusted for inflation, is the biggest in the nation's history," said Don Hays, president of The Hays Market Focus Advisory Group, an investment consulting firm. In a Reuters report, Hays suggested the Fed may be "flooding the nation with cash" over fears expressed by central bankers that "the Y2K bug could do more damage to the financial system than most people expect."

hmmmm

The market is determined by the consumers. If consumers won't pay x for a product, but will pay y, then the market does not support x but does support y. (basic economics, learn it sometimes)

So YES the market has prices which is supports.

Bolivia doesn't matter..its like asking how does my computer affect the cost of tea in southern china vs northern china.

Your computer could effect the price of Tea in Southern vs.
Northern China. By using your computer, you are able to
purchase tea online from Southern China for much less
because they don't need to invest in the infrastructure
to market tea to you. A few websites and its a point and
click away.

Whereas Tea in Northern China may still be brick stores
and person to person sales, making its tea more expensive
due to the cost of aquiring it and delivering it to your door step.

Exactly, because your scheme is NOT in place. Just who would gain if your scemes were in place? Why of course!!!! The people who just dabble in L$ purchasing and selling. I dont need to use propaganda, you seem to do it quite well yourself. Ive been there, lived it. It doesnt work.

What you seem to always miss is, this isnt RL there are no basic needs. We need no food, no shelter. Its all about creating and buy if we wish, its not a need.

Im curious, do you create anything? Do you own land?

You missed the point. At this point I believe I shall ignore reserve's socialist propoganda as he once suggested. Wise advice along with this:

I believe you've been using too much of your
own propaganda. Your crystal ball is flawed.

also attributed to him

He -does- make such great quotes when hes talking about himself.

I was kinda wondering... maybe this all stems from frustration at not being able to make 'widgets', like all the cool kids...
I can't make 'widgets' so how can I make money from SL? I know... sell prims to those who can.
I'm fairly sure there's at least no passion for building or creating there... otherwise the concept of paying for prims would be mortifying.

The "Gov't of Second Life doesn't have expenses". You mean all of the servers, network infrastructure and salary for their Linden Labs staff is actually all done for free?!? SL is not a stand alone economy. It is an economy propped up on the US$, existing on a US$ infrastructure. L$ are just a simple way to translate micropayments for users. Will you please shut the hell up and go away.

That's exactly what I did!

PS: IM me in world to come see my new hair-both styles, bought for 250L each.....

Sorry, let me expand so your mind can comprehend.

"Gov't of Second Life doesn't have expenses" in terms of
Linden Dollar outputs within the game of Second Life.

The US dollar expenses that LL pays do not effect the
valuation of the Linden Dollar. Salaries, Servers, etc
are all part of the US Economy, not the SL Economy.

Zee, if you don't like what I have to say, then ignore
me. Then you'll only see what others have to comment
about, you'll never see my posts again. Good Day Sir.

I thought you ignored me weeks ago... Please press the button so
I won't be bothered with your comments.

So the value of the Linden against the US dollar has gone down, is going down. So what?

The people who should be griping about that the most, in one respect, are those whose primary source of SL income is that 500 L/week they get for their $9.99 monthly -- they're buying at the same 200 L/$ price (actually, 216.88 L/$ over a three month period, because of the extra week each quarter). So, even aside from the transaction costs, only the very stupidest SLer is taking that stipend and going straight to SLX or wherever to turn it back into $ US, he's just pounding sand in a rathole.

So -- the downward pressure on the Linden is coming from merchants and "land barons" -- and people leaving SL for good, after having accumulated substantial Linden and/or land. It cannot, logically, be coming from anywhere else.

The stipend fuels the merchants' and land barons' withdrawals? So what? If Anshe Chung is working in SL full time, managing her SL real estate, she needs to pull Linden out as $US to live on (assuming she's not an heiress or the recipient of a fat personal injury settlement or like that). If people have invested large amounts of time and skill to create and market successful product lines, and turn Linden into $US, so what? If they did *not* do so, and all the Linden stayed in SL, what would happen? My first guess is that land prices would go up, and maybe so would other prices.

The majority of people *don't* do much, if anything, in the way of making things or selling things -- even if half those 140,000+ accounts are alts! It's pretty hard to break into the market these days, there's a lot of competition. If people don't have Linden to spend, SL can be pretty boring -- and if it's boring, why bother? To prop up the value of the Linden by buying things? Without people, SL means nothing.

And, the "inflation" of the Linden against the $US only hurts those who *do* sell Linden. So, they have an incentive to limit their sales, to support the price. If they are selling enough Linden to deflate its value against the $US, that is *their* free market choice.

And if you think that this has anything to do with Bolivia, you need to wake up and smell the coffee.