17.7M in Sinks to a whopping 59.2M in Sources!!

Jessica drank the linden kool-aid...

Edit: Acting like chicken-little and worrying about the sky is falling, base simply on $L generation > $L sink is pre-mature. Better now?

In order for an economy to continue to grow, the total money in circulation must increase, hopefully by market forces. This is done in RL by the banking system. Please learn more about how banks generate money.

In SL case, there is no banking regulations and the few financial in SL are not banks (i.e. they cannot lend more money out than they have liquid $L, no line or credits... etc)

There are limited ways where money can be generated in SL... all controlled by LL: Dwell, Stipends, and instructor payment.

Without new money, the economy will not grow, sure the value of L will get stronger, but as the number of residents increase they will be competiting for the same unchanging amount of L, the Economy will slow. People will be more likely to hold on to $L instead of spending it because the perecived value of $L would get higher and higer to the point that it worth more that what it could buy. Gone are the days of micro-transactions, many establishment relying on donation would suffer (like RL situation, when hard times hit, first group to suffer are the charities)

That said, LL's communist like centrally controlled monetary policy is somewhat lacking, it's slow to react, and if a system like this really works... Communisium would not have failed.

Stability in currency is good... but blindly scream for the end of stipends without something else to take up the money generation role (LL selling $L), is misguided

You guys are killing me this morning lol

Why try to control the ability for people to buy and sell
when the "problem" is with the Economic Policy of SL?
Fix the policy, you fix the problem. Controlling the
market place only masks the problem...

Yes, you are correct. The problem in SL is that LL is growing the
money supply faster than the economy. Linden Labs is drinking their
own kool-aid with the user account growth which is skewing their
perception of growth. Causing them to flood the market with linden
dollars.

If the money supply matched the growth of SL, the valuation of
the linden dollar would be pretty much flat. Yet in the last 6 months,
the linden dollar has fallen nearly 20%.. I don't think anybody can
consider that a healthy economy...

I love how the linden/USD average has risen lately. Truly a healthy economy.

My thoughts exactly... L$310 and rising... Going the same direction
as the Bolivian Currency in the 1980s..


1000 Linden Dollars / L$310 = US$3.22


Best buying rate: L$310 / US$1.00
Last trade: L$310 / US$1.00
Last close: L$304 / US$1.00
Change: +L$6 / US$1.00
Today's volume: L$1,000,414
Today's open: L$304 / US$1.00
Today's high: L$310 / US$1.00
Today's low: L$304 / US$1.00
Today's average: L$305.6803 / US$1.00

I think we have offically reached Sept/Oct 2005 values.
We are now around the same value that GOM listed just
before it closed its doors and LindenX took over...

RBD.

I agree the money supply is out of balance.

Maybe the LL to sale $L is hint that account would may be modified such that there will be no more Preimum account, only basic and tier fee. And anyone who wants to get more $L would just buy from LindeX with LL act as a stabling entity to put in buy/ sell orders as the price drift too far from the "optimal" price?

On another thread this had been discussed... wonder where that is...

* covers her ears and sings a song loudly *

The LindeX was implemented by LL in an effort to stabilize the linden...

and by golly thats what theyre doing!

P.S. - We just so happen to be going through a 10 month blurp, since the inception of the LindeX, that's all

Actually if LL doesn't turn this around once SL gets used to heavy inflation being the norm your not gonna like the result as a currency buyer. At some point the economy will react and prices are gonna snap up and sharply because the economy is resisting change. Once that happens sellers will be pricing inflation into their products. Lets say someone creates a skin with an estimated 3 month life cycle. They value it at 2000L right now but in the next 3 months they expect 3.75% inflation. That alone boosts the price to 2075 if they add on another 5% to account for the increased risk of an unstable economy that 2000L skin goes on the market for 2179L. If you buy that skin thats an extra 179L out of your pocket you wouldn't have had to spend if the economy was stable. And at some point those prices you brag about not changing will wind up looking like freebies and won't impact pricing on the regular market.

Then I'll simply build my own things. I am working on psp for clothes, and learning more complicated building through experience. I even made my first script modification that involved more than a numbers change, etc yesterday. Sure, its only adding a played sound to a script touch effect, but thats my first step to making my own scripts.

Ohh PuhLez.... LindenX is stablizing the Linden Dollar and
GOM was somehow raping the dollar?

GOM was a truely free market to trade the linden dollar.
Much better than LindenX. Regardless, a trading floor does not
provide stablility, it only provides a place to bring together buyers
and sellers.. Stability comes from "Policy", not "Trading".

Stipends are not the problem.

One of the issues that I theorize, is the vast camping farms which allow people to "earn" a significant amount of L$ without having to spend a USDime to get it. Have any of you "take away the stipends" people actually walked around and looked at how many of these farms exist?

I have... however... in my wanderings noticed that the payouts and quantity of camping chairs began declining within a few days of the announcement that dwell payments are on their way out.

I am hoping that with the removal of the dwell payments, the number of camping farms will continue to decrease, and the need to purchase L$ will become more pressing for those who have been relying on handouts.

I can't wait to see how many people jump on me again about this.

Just think... if all the camping chairs in SL suddenly derezzed, never to be seen again, everyone who has been planting themselves in those nasty little buggers will have to actually spend USD for L$. Considering the shear number of locations offering camping... that might actually boost the value of the L$ significantly.

Camping = Slower USD/L$ transactions = Devaluated L$

Supply and demand people, supply and demand. If you are giving it away, you can't complain when it becomes worth less.

>---------------------------------snip----------------------------------<

It's funny how you can put a spin on what someone is saying when you omit the bulk of what is said.

Nice work twisting my words.

I like the sound of most of your post Burnam, but the fact remains that stipends are the problem.

For you to begin your post by stating "Stipends are not the problem," then ending it by stating "Supply and demand people, supply and demand. If you are giving it away, you can't complain when it becomes worth less," is the epitomy of hypocrisy.

There may be other contributing factors true, but that does not erase the fact that stipends are a problem.

All I ask is for a little consistency

From my understanding,

Dwell payment does not cover the camping chair expense, it helps but the majority of the money are from people gambling at these sites. So the $L paid to these campers are mostly from other resident's pocket or some USD transfer.

So taking away dwell will not remove camping chair, just make the payout worst.

Also look at the amount of dwell payment versus stipend payment, stipend is 10 times of what dwell is.

One might say: "I'm buying $L with my subscription."... no you are not. You are paying LL lab to increase the money supply, which just happened to land in your pocket. The $10 or whatever you pay per month does not go into the SL economy.It goes into LL's pocket.

I think SL's is getting to a point that the existing money generation method is not good enough.

"Pay for land tier, buy $L from LindeX with LL passively controll $L supply" sounds better and better.

I personally don't car eif stipends ar ethe 'problem.' (I see it as undercutting that is.)

Regardless of the 'problem cause,' I PAID FOR MY STIPEND. To take it away requires renegotiating the contract at hand (I pay for more than monthly) or recompensating me in a manner we can agree on.

Edit: I pay LL my premium fees. They give me my weekly stipend and land rights. Thats called BUYING YOUR STIPEND. It doesn't matter WHERE LL gets the lindens for it. Its STILL paid for.

Not to mention that most of these establishments use camping chairs to secure a spot in the "Most Popular Places" list and simply write the camping chair expense off as advertisement costs.

So youre right, dwell is going to have little, if any, impact in a good majority of these locations.

I will expand on the issue to include some of the other factors mixed into what my point is. The issue of the devaulating L$ is more than an influx/exodus issue. I have been doing a lot of thinking about this issue, more due to my eventual desire to sell L$. I have yet to do so.

The popularity of a location is based on the traffic the location receives. It is financially viable... or at least it was with dwell payments... to offer camping chairs at a location to boost the popularity of a location, hence moving said location up the search list under "Find Places".

Content which is useless could be extremely popular with enough camping chairs at the right payout. The earnings made from the better search listings combined with the dwell payment offsetting camping costs, the tactic could be rather successful in promoting one's location.

This does 2 things. It prevents decent content from having as good a chance as crap content from making the "Most Popular" list, and it provides a wealth of L$ to people at no cost. If someone can set their av up with an anti-idler in a camping chair, they can earn far more L$ than stipends pay, and they do not have to buy any L$ on the LindeX.

This... in my theory... has contributed to a significant slowdown in the purchase of L$ by a significant portion of the population of SL. With the removal of dwell payments... I am hoping there will be a decline in camping farms, thus increasing the need to purchase L$.

In addition, I believe that popularity needs to be adjusted in its calculation. Traffic doesn't mean popular. I would love to see popularity based on a rating system. A ratio based on number of votes to amount of traffic.

1 person voting for a location that has 1000 visits in a day is much less popular than a location that has 10 votes with 100 visits in a day. This would provide 3 immediate effects.

1) Camping farms begin to fade away.

2) Newer content has a chance to become popular.

3) Content is judged based on QUALITY, not number of camping chairs.

If people start providing more quality content because they start getting more traffic and business because... well... it's quality, I guarantee you the L$ will start moving more quickly through the LindeX due to a revival in the economy.

The camping chairs will be less and less a problem, also increasing the purchase of L$ on the LindeX.

Supply begins to move... demand increases... value follows suit.

It would also be nice to see some of the newer content get some of the business that is currently flowing to a few large players... who... by the way... will dump a rediculous amount of L$ onto the LindeX to drive the value down with the intent of buying what is out there at the lower price.

Then, when the value starts to come up again... those people will have made a killing. Smart business on their part... bad business for the rest of us.

Simple, let the current contract run its term (monthly, quaterly, annually). Afterwards, Priemum account shift to a new "land owner" account, with a reduced fee. (The tier rate would need to be adjusted of course)
If anyone need $L, buy it on Lindex. There will be a transitional period, just like we had a bunch of paying basic accounts from before...

As for why where the $L comes from matter... please look up hyper inflation. The USD you paid LL goes to their operation budget, not anyone in SL. As far as SL economy is concern that 500$L you get every week comes from no where. Just like Deutschmark in the 1920s.

That could be as simple as saying your stipend only lasts till renewal time then you either accept no stipend or downgrade your acct. And it would gradually phase out stipends over the course of a year.

Several people have suggested removing stipends, even for premium accounts. My question is, why would people then choose to have a premium account when they could just buy lindens and rent instead of owning land? And if large numbers of people stopped paying for premium accounts, what does that do to our beloved Linden Labs, which hosts the servers we frolic upon? Here is my prediction of a chain of events if stipends were removed:
A) People cancel their premium accounts.
B) People rent instead of paying tier.
C) People economize space instead of renting large tracts of land, resulting in less demand for rented land than the current amount of owned and rented land. Additionally, land is owned by a small group of people with huge amounts of land, which they pay less on per square meter than smaller landowners.
D) LL receives fewer USD in land tier and has fewer premium members.
E) LL is forced to come up with other ways to bring in USD - perhaps no basic accounts for free, perhaps increase in land tier fees.
F) People pay more for the land they rent, driving inflation and leaving us with the same devaluation problem as we currently have.
Now, removing stipends for basic accounts does make a little sense, but I wonder how removing stipends while costs for attending events goes up (due to removal of dwell) would effect the number of residents joining and staying in SL.