Stipend/Upload Reassessment

Right now anyone who does any kind of work in sl, animations, clothing, landsales, has seen a major dive in the lindens value, thats no secret, this post will try to explain why in my eyes the economy is dying on its feet.

I found this quick image online that shows something about how the us economy works.



If you kinda look it over you can see where the money is going and what happens to your us dollar. Now I bet everyone has heard of inflation rates, basically the inflation rate is how much money the us government wants to hold in its banks and out of curculation to the people so as to keep the value high. If the value of the dollar gets to low, they simply slow the funds going away from the goverment.

Businesses and People also help keep the value high by saving money themselves for later use, it takes funds out of curculation, so the demand for funds stays high.

Now I will outline the SL economy so it can be understood and then tell ways for the economy as a whole to correct the issue of falling prices.

if you were to outline the SL economy into US terms, it would look like this:



But this is in truth idealistic. In the US economy, businesses pay taxes, pay utilities, pay for alot of thing for themselves. So their money is kept seperate from the owners. In sl, the money goes back to the owner because there is no need to keep the money seperated nor is there a possibility to do so.

The economy's model changes to this:



which if you look, where is money to go? its pinned in and has no where left to go. It just circulates in itself slowly drowning in added stipend funds. The only 2 exits, upload fees, and land teir (This is an assumed transaction, if LL does not put this money back into circulation then this is a solid sink of funds, of they resell it over lindex, then everyone is simply stewing even more).

Now then, the only option left is either lower stipend rates, increase upload rates, have more people pay their teir in straight lindens before exchange and remove the funds from the economy, or people have to save more which isn't any kind of long term solution, its just holding the problem for another day.

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Side note: (Please respond to this in another thread, this is a bit off subject.)
I just got done reading about Anshe Chungs plan to create a new currency of her own, and I am forced to ask, is your business willing to sink funds ie buy currency simply to destroy it and remove it from circulation, or will it be resold to another person and continue to have no exit. The economic model is much different then these shown here, but if you would like to give me all the specifics I would be happy to try draw one for you to see where everything is going. But in truth, all money has one common rule, supply and demand. I have money, you demand it, if you have money, you won't want mine, if I have what you offer, I won't want it. From what I have read, it would be little more then a bank moving rl money, which in itself maybe illegal without proper licencing, and is this money just going to sit, or is it going to be invested? If its invested, is the company willing to bite the bullet and pay the difference out of her own pocket if the investment is a bust? Theres alot of questions to be asked before venturing into a deal like this.

That's too simplified, and too complex.

It's too simplified because there are businesses that work for the government, businesses that are owned by the government, small businesses, large businesses...

It's too complex because businesses aren't really a separate box. Businesses are owned by people. Some of them are huge, some of them are single individuals. You can't really separate "business" from "people" like that in a meaningful way.

You can separate out "capital" and "labor", or "producers" and "consumers".

In SL, there's only one kind of capital. Land.

But that capital isn't really productive. You don't use land to produce goods and services, in general. You don't get paid (not significantly, anyway) for anything you do on your land. The Developer Incentive made some land into productive capital, but in general the only thing you do with land is advertising. You use the land to advertise that you have something for sale.

You don't need a huge store to sell stuff, you can sell evething you make from a half meter ball you rez next to yourself in a sandbox, or through an external website. But you'll get more sales if you have a store, or rent space in a store. Like you can sell more stuff on the web if you have a website and banner ads.

Technichally you can't - because there is no selling in the sandbox.

But your point holds - A friend of mine sells all his prefabs on a single vendor in the corner of his (mainland) lot.

all that model is ment to show is that businesses and people are seperated under global economy, wether you own a business you not you money is seperated from the businesses account unless your running a yard sale and even then, how many yardsales do you know that use a strongbox rather then a guy paying you out of his wallet your change?

This comparison doesn't work.

But they're not. It's all just bookkeeping.
I have a savings account, two checking accounts, and money in Paypal and in Linden Dollars.
My boss two jobs back typically carried around ten grand in his wallet, and bought computer equipment for the company with cash.

There's a lot more exits than that, there's classifieds, partners, first land, auctions in L$, groups, probably more sinks that I've forgotten. They have more (and better) options than just lowering stipends, they could increase current sinks and add new ones.
Also. tier is not an exit or sink, people pay LL in US$. They're not about to start letting people start paying tier in Lindens, they'd just be cutting their revenue.

Actualy back when I first joined they did let people pay all or part of tier in L$. Problem was the exchange rate on that program was horrible (far worse than lindex today) so no one used the program and it was eventually abolished.

the economy is like that in rl if you look at it because going to a business is jsut like going back to the people