L$717,618,852 And Growing

Well said.

Tempest in a teapot.

If $L go to 2000/1 USD, it doesn't make a bit of difference to me. I can still upload 50 files a week with my stipend.

My heart vertiably *bleeds* over the thought of the poor wittle capitawists losing money.


Maybe if they lose enough of it, they'll quit SL and take their rabid economic darwinism with them.

At that point there would be no SL. If all the content creators left, there would be fewer and less content of high quality than there is today.

Why would content creators leave? Do they not get to create content anymore because day traders aren't making hundreds of USD per month?

Right, because up until a month ago when they brought in Market Buys to enable day trading, no one ever sold anything on the Lindex *rolls eyes*

If all the content creators left there would be NO new content!

I somehow think that is a rather unlikely outcome..

Many content creators do not do it for the money..

If all the people who are here just to make a quick buck left, new content would be created by people who love the game (and creating content) for the sake of it.. And I know who I would rather reward!

Well, stallion, instead of the snarky eye-rolling, perhaps you'd like to explain to the audience you're mugging for exactly how you know that content creators would stop creating content because the bongo-buck-to-dollar ratio has changed?

I rolled my eyes because you comment was, at best, naive. Day trading is very recent and I can tell you with fair certainty that much of the high quality content in SL is made by people for whom SL is a full time job.

No offense intended but how old are you?

I read the bit about day trading as a side point. Personally I think the currency devaluation is caused by content creators and land owners dumping large quantities of L$ at high prices, and also too few sinks in the economy, but they are also side points.

The real point is: content creators won't leave if the currency devalues,they will just increase their prices. If people are willing to pay for content, they will pay the new prices. This isn't evidence that the economy is broken, it is just inflation.

Like in the UK 10 years ago I could buy a flat for £80,000. Now the same place costs £200,000 or more. This isn't evidence the economy is broken, it is just inflation (and currency devaluation) which is part of a normal healthy economy.

The unhealthy part is when Inflation causes the currency to devalue by 25% in 6/months. Which sucks for people who rent out property or hold L$ cash in hand.

Stability in SL should be a valuation rate which doesn't rise or fall more than 3% a year. But the history of the Linden Dollar has been from Boom to Bust. Thanks in large part to the growing money supply. Which grows based on registered user numbers instead of GDP growth. 10,000 new users who don't produce any content/services/etc don't require a money supply increase.

Overall, my argument is that LL should grow or contract the money supply based on GDP data from all transactions in SL... As the GDP grows month-month so should the money supply. Since more transactions require money cash in circulation to enable liquidity. If GDP declines, so should the money supply. Since having too much currency in float at times when transactions are lack luster leads to increase selling of L$ and bringing down the valuation.

GDP Growth/Decline = Money Supply Growth/Decline = A Variable Stipend Policy.

For example, lets assume SL-GDP grew by 1% last week. If the currency float is L$700,000,000 and we have 300,000 residents, everybody gets a stipend of L$23.
And the reverse is true. If the GDP declines by 1%, then everybody is sent a mandatory deduction of L$23. If your account has L$0, it will now have -L$23. So the second you aquire any cash, it goes to pay off your account deficit.

No Sinks, No Fixed Rate Stipends, just a monetary policy geared around GDP growth/decline.

I have not seen any significant inflation in SL.. prices still seem much as they were.. the only thing has been a moderate-high devaluation of the currency. The problem with this devaluation just means that you should increase rents, and not hold L$ in hand for long periods. If you cannot do this, you should find a different business model.

Your other points sound OK, but I would not get too hung up on the stipends. At some point the currency will have devalued to the extent that they are worthless (for buying content)... so at that point people will have to buy extra currency, or make do with cheaper priced goods. Overall the market will right itself (as far as I can see).

Sounds like price fixing to me.




"Mandatory Deduction"... what a pleasant euphemism for theft.

Care to explain how will fining/taxing/stealing money from the entire consumer base has any chance of turning the GDP around?

Assuming of course, the lynch mobs have left anything standing after the first time everyone is fined instead of given a stipend.

--
"pay off your account deficit" by yourself. Keep your mitts off mine.

Interesting that someone that usually touts the free market economy so strongly is now suggesting there should be a strongly, irresistably strongly, centralised control of the economy...

Actually RDB's suggestion could be regarded as taxation, even though I don't agree with the underlying assumptions. But then by comparison to a lot of them I'm politically to the left, I don't have a problem if LL discusses, considers and introduces a tax system, and have, in fact advocated a different one to this in the past.

I have when paying rentals.

37 - you?

61

I don't object to the idea of taxation either...

But income tax, sales tax and property tax are proportional to my income, purchase and property.

Unlike RBD's population wide "Mandatory Deduction".

MONEY SUPPLY INFLATION.... When will you people educate yourself on what the word Inflation encompasses?


in·fla·tion
A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currencyand credit beyond the proportion of available goods and services.



Translation: Printing New Money without sound economic reasons. And population growth isn't a reason.. When those new people start producing, then yes. Until then, No...

There has to be checks and balances to keep the government from uncontrolled printing of new linden dollars. I'm not talking about central control of micro economic issues. I'm talking about preventing inflation or deflation so you end up with stability. The market will ebb and flow based on supply/demand directed by the economy itself. But uncontrolled currency printing with no influence by the economy will cause inflation. Just like in Germany after WWII.

If the "economy" demands more currency, then you print it. If it does not, you stop or retract the printed currency. There should be "just enough" for economic transactions. Not an oversupply which kills the economy.


Just like in real life, the Government prints new money at the request of the Federal Reserve. And the Federal Reserve makes those requests based on the demand from its member banks (ie: Bank of America, Wachovia, etc). And those banks receive their demand or lack thereof based on the front line economic growth or decline of the overall economy... Whereas is in SL, the government is just printing new money with no demand based reason for doing so. As such, it causes an over supply of currency which ends with devaluation via Inflation. Money Supply Inflation for the nitwits who think inflation is only triggered by rising prices..

You've been a bit cranky lately Reserve. Also population growth is a good reason to print new money otherwise we'll run dry and per capita will be too low.

Looks like we're both wrong. We may be seeing 300 much earlier than September.

He is just going to get worse as the L$ strengthens. He must be mad about all that L$ he sold over L$330/1.

WWI... do get your details correct.

Mean while, you keep going on about the inflation/money supply issue causing devaluation while the L$ keeps on growing in value... Ever think that you're wrong about this?

I applaud the person waiting at 308 for the last month or more with a million plus. Looks like their patience has paid off soon.

ATTN: Reserve Bank Division

That really is a wonderful posting that you have made. It is fantastic that you have found this definition and brought it here to share with everyone to help ensure that those participating in this forum have a more complete understanding of the nature of the ever present threat of inflation. Again, wonderful work, and fantastic idea. Your dedication to the community is a testament to your own standards of excellence and honor.

However...I do feel that it is my duty as a responsible resident and participant in this discussion to note that the definition that you have chosen to use....Defines inflation as a COMPOSITE, consisting of two unique parts. In other words, both a cause AND effect must be present to complete and fulfill the definition as quoted and submitted by yourself.

In this case...I think it is most probably clear to anyone who chooses to look that there has, in fact, been a NOTICEABLY Persistant Increase in the supply of money over time. This element applies directly to your noted element of the quoted defintion.

However as I see it, the supplied and quoted definition was selectively applied, thus placing an undue emphasis solely on the element of increased money supply, while effectively excluding further additional requirements for the state of "inflation" to exist.

As such, there are two substantial open issues that remain.

First. The question must be asked...Is the increased supply of currency and credit BEYOND the proportion of available goods and services? I have yet to see this demonstrated and would consider all data presented regarding this issue to be extremely valuable.

Second and equally important, is the NOTICEABLE ABSENSE of the resulting required EFFECT of the increased money supply "A persistant increase in the level of consumer prices or persistant decline in the purchasing power of money..."

As others have noted, as of this time, the purchasing power of the Linden has stayed relatively stable In-World, while prices have not yet established even the slightest trend of increasing In-World either, and certainly not a PERSISTANT increase.

No EFFECT equals no INFLATION....according to the recently supplied definition that requires the presense of both elements. CAUSE & EFFECT must BOTH be present in order to fulfill the requiremements for the stated definition of INFLATION.

In an effort to reduce the confusion already present in the discussion, perhaps a definition that more fully matches your line of reasoning could be provided?

Unless, of course, you would be willing to concede that the state of inflation as defined by yourself, DOES NOT currently exist In-World. Rather that it is merely the THREAT of potential FUTURE inflation that you are concerned with.

Due to your continued and non-tiring efforts to educate the resident population of the very real economic dangers of inflation to society, business owners, and consumers, I have NO doubt that you will pursue the clarification of this matter with all haste and due diligence.