Call American Express, Need More Cash

The Linden Dollar's run up seems to be running out of steam. Better call American Express for some more cash to buy all those Linden Dollars finding their way back into the Forsale Side of the Market.

As I'm sure all the highly educated hypsters who have been cheerleading the L$ bounce from L$330 to L$300 are fully aware that to sustain the new Linden Dollar valuation requires a constant inflow of US Dollars to buy up all the Linden Dollars being sold on the market. If the amount of US Inflows declines, so does the demand side of the equation. Net result, a declining linden dollar. Putting it right back on track to decline... Like I said before, its just another historical Dead Cat Bounce for the L$. When was it, some time in 2005 when the L$ dropped to L$260 from L$240. It then Paused, and began its decline once all the buyers ran out of money.

People think I'm talking out the side of my neck, but they need to look at the fundamentals, the amount of new linden dollars continues to grow, adding to the supply of L$ in circulation. Without the demand from the economy (in the form of deflation), there is no justification increasing the money supply. Because its only result is an increase in the amount of L$ being sold on LindenX. If SL had valuable L$ denominated assets, there might be demand for L$ outside of buying widgets. In any case, enjoy the bump in the road, because it appears the rally is dead.


Better call the Rally Monkey, cause this currency needs all the suckers it can find.

This is the assumption on your part that makes your post poorly thought out and merely presented to attempt and justify a self-serving point of view RBD.

You don't know to what extent there is a demand for the L$ in the economy.

None of us do.

Yes "the amount of new linden dollars continues to grow, adding to the supply of L$ in circulation" ...

... but so is the population.

If the SL population numbers remained static, then your point would be more credible. That is not the case however. There are thousands of new iresidents being introduced into the SL economy every day that have no linden. and need to purchase them from somewhere.

IMHO, the L$ is showing surprising strength. One day after wellfare Tuesday, we are still under the L$300/1USD rate.

Having said that, I see it the other way around than you do. There is surprisingly very little keeping the exchange rate from the magical L$250/1USD rate.

I wouldn't be surprised if we are under the L$290ish/1USD rate by Friday.

RBD you silly rabbit, it is what the stock market calls "profit taking".

Dont worry RCB think


everthing is going to be ok

Actually, I was thinking of another body part.

We're all sorry your 999,999:1 buy order hasn't been filled yet. Spreading your FUD and bashing the $L isn't a good way to fulfill your personal economic goals.

You get tired of posting as Pan Fan?

And somehow population growth and L$ demand are linked? A 1,000 new residents who get their free account, wander around, say "Thats Nice" and never buy any land, widgets, etc don't create demand on the L$. As such, growth of the L$ should not be tied to the growth in the population. Linden Dollar Growth should be tied to (REAL) Growth based on an increase in the GDP of SL. And the GDP is compiled from all transactions.

If the 3rd Quarter, the SL GDP grows by 10%, you can (using real data) determine that you have a 10% growth in the economy. As a result, you need to increase the money supply to prevent deflation. It would be foolish to ignore GDP data and just blindly grow the money supply because you signed up 10,000 new people. Not knowing if/when they plan to help grow the SL economy. Because what you end up doing is flooding the market with new dollars and crossing your fingers hoping the economy gobbles up the increased supply. If it doesn't, everybody is screwed because the ungobbled supply will bring down the valuation.

Check yourself, before you wreck yourself.

I called them . and NP - I can do a cash withdrawal in any bank.... using my AMEX..

/Tina

I like this alt the best out of all your currently active alts. It's the most literate.

I never said that they were linked RBD.

It is simply an unknown that is not accounted for in your post.

To say that 1,000 new residents wander around and say "Thats Nice" and never buy any land, widgets, etc ... is merely another assumption on your part.

You could just as easily say "1,000 new residents who get their free account, buy millions of linden from the LindeX then go in-world and go on shopping sprees, creating a huge demand for the L$ ..."

But you would not say that would you?

Is it because it doesn't support your self-serving point of view?

Of course they're linked. Once those new residents get a taste, have some fun, and discover you need some cash to make your avi look good, or buy that cool thing they saw, many of those free accounts will start buying L$, in the absence of stipends. The more people who try SL, the more you will retain as actual consumers. Cast 10 hooks, you might get 1 fish. Cast 1000, you'll probably get 100.

Removing the need for CCs to sign up isn't just about allowing people with no CCs in. It's about human nature. Some people aren't likely to go through the rigmarole of a more complicated sign-up process on something they're not sure if they're interested yet. Standard consumer behaviour. Every extra step between the customer and the sale, is an opportunity to go, 'nah, I won't bother'. Remove as many barriers as possible, the more often you'll seal the deal.

You are correct. And it is a very sound assumption. Otherwise there wouldn't be a Land Glut and prices for land would be through the roof. Because 300,000 people buying up land would dwarf the available supply. But you don't see that happening. And if folks are shelling out the money for land, then the same will be true for all the widgets in SL..

Economics is not a science, it is an art. And just as I speak, the L$ is beginning to fall. You might be right, and I wrong. But as the clock ticks and the brief buying demand for L$ dries up, the only direction for the L$ is down. Based on the reasons listed above.






Yeah I could say that, but there is no obvious data, rumors, hints, or eyewitness accounts of that happening. As such, its pure speculation. Thus, not addressed by my calculations. Unlike my comments which can be supported by Historical Records, Daily/Monthly Averages, and using the old phrase "All things being equal....."

Point to a Widget, Asset, Land, something that would be driving the recent run up in the L$'s valuation which can sustain this level? Otherwise, you can only make an educated assumption that the recent run up was a short term hiccup with no fundamental economic support to sustain the run up. Not to mention that it was a quick run up, not a long and drawn out run up. Making it all the less likely that fundamental's within SL are behind the run up. More like a rich kid who decided to buy up a few thousand dollars of L$. Once his piggy bank is dry, there goes the support and back down goes the linden.

... and yet the exchange rate went from L$330ish/1USD to under L$300/1USD within a two day period.

Calculate that.

Just like I said before... LL is pumping in new Linden Dollars on the expectation of economic growth from population growth. Not from "real" numbers showing growth. As a result, the "current" economy has to absorb the new money supply until that expected growth materializes. And unless the current economy is willing to open their wallets and pump in new USDs for the New L$, the L$'s valuation will decline.

What is there to calculate? That is exactly what it did... The question you fail to answer is how will it be sustained? Is L$300 a sustainable level or is the run up just a bounce? Where is the evidence to support that L$300 will sustained and/or increase over the next 3months, 6months, etc?

Did somebody invent a widget that is a must-have for 300,000 residents and its priced at L$10,000? Causing everybody to buy huge amounts of L$?

Pumping in new Lindens? Only in the form of premium stipends... basic stipends are gone for new residents, dwell is gone... so they're pumping less than they used to.

I wouldn't claim that it will be sustained. I am not the one playing prophet here.

You are.

My point is that I could not prove this no more than you can disprove it.

It is all speculation.

Hence this thread is worthless to you, me and anyone else who reads it.

There hasn't been sufficient time for all those new residents to convert to premium account land owners. I would describe land as a lagging indicator.

And land and widgets aren't necessarily linked... heard of a tourist economy?

Back in mid May, the Lindex had it's first $200,000 week. At the time this was a record: apx $200,211.48 USD for the 7 day period ending May 18th.

As of July 2nd, the Lindex had it's first $300,000 week, and on July 3rd, it set the current record for amount of USD spend on the Lindex in a 7 day period: $303,845.45 and $304,302.80 respectively.

In a little over six weeks, the demand for Lindens as measured in USD has risen over 50%.

The increase in demand is quite dramatic and is easily outpacing the growth in the overall currency supply.

Bingo

I wouldn't write it off just yet. It may yield some slight entertainment value.

Pumping Less, but still pumping.. Translation: The L$ will continue to decline, just not as fast.

Thats fine.. Nothing wrong with a Tourist Economy. But will the tourist create a year over year growth in the L$'s value? Or will the continued L$ Stipend Pump overwhelm the tourist economy? There still seems to be more long term downward pressure than long term upward pressure.

wb RBD,

I already feared you got lost on the search for the excess money pouring into LindeX.

To provide you with numbers:

ATM (11:05 am) there is a volume of open sell orders of L$ 17,079,842. This is still less than the 44-day* average of L$ 20,834,539 or the peak volume on May 23rd, 2006 of L$ 32,783,680.


* when limit buy orders where implemented

btw, did you grab this unique chance to sell your millions?

/130/83/111390/1.html#post1119796

Keiki:

Short term stats from the last 30-60 days is hardly justification for an increase in demand. What happen from Jan 06 - April 06? Why the decline from L$260ish - L$330? What happen to demand for 4-5 months of 2006? And what has triggered May-June 2006 to experience a quick run up in valuation? Is it something that can sustain these levels? Did 100,000 new people just join in the last 30 days which trigger the demand? What concrete numbers support the L$'s rise to sustain itself?

Without it, the L$'s rise falls into the category of Dead Cat Bounce as you compare it to the historical decline month over month, year over year, of the Linden Dollar.

Hi there RBD. You are obviously the guy everyone keeps saying I am an alt to. lol. I agree with much of what you say and have been telling these boneheads for the past few days that the rally was over and we'd be at 300+ by Wed. Not one person agreed. *Takes a look at the LindeX* 300+, WHAT DO YOU KNOW!?

SELL!