Call American Express, Need More Cash

Preach on my brother... SL is full of inept economic boneheads that cannot grasp the simple Econ 101 concept of Supply and Demand. They are fools who believe a short term bump in the valuation price with zero supporting information over a 2 year (almost 3 year) history of the linden dollar falling from L$175 to L$330...

If you have any numbers, please share them.

You said that demand for lindens was not increasing. I showed you crystal clear and dramatic evidence that demand is increasing at a rapid rate. You brush it aside by calling it short term. This trend has been in place for far more than 30-60 days. Just look at the volume of the Lindex since it's inception. Demand for Lindens has been increasing steadily since the Lindex's inception.


As for the rest of your questions, I'm not going to bother with a detailed analysis that you will simply brush aside by saying "dead cat bounce" yet again. You claimed demand was not increasing. It clearly is.

I don't need to prove why the L$ is going higher, its you hypster who need to prove why a 30day bounce is somehow a sustained rally that supports the L$ at this valuation and how this phantom demand is going to move it higher.

As for me, my data is right here... Clearly showing a long term decline in the L$'s valuation which is on par with the continued increase in the money supply.






If Jamie or others who still have data from GOM Days, go ahead and post it.. As it will show Xerius what he/she has missed since Sept 2004 to Present...

Sorry Keiki, I guess I should have been more clear about what I mean when I say (Demand).

I'm not talking about the short-term demand. Any joker with a fat wallet can buy up a huge block of Lindens and your data might record that as "demand". What I'm talking about is, what are the fundamentals in SL which has sparked a "demand" among the general population that requires folks to increase their wallets with L$?

Is there demand for more land? more widgets? tulips? what? Anybody can round up some stats and say, "Ohh look, in the last 30 days, demand has grown". What you need to accompany that data with is the hardcore evidence that is driving the demand and how it will be sustained going forward.

Otherwise, like I said 100 times, its a short term bump in the road...

Well anything under one year, in Econ terms are considered short term. Long term is 1+ years at the min and if you are talking about GDP then long term = 2+ years. So 30-60 days is short term. Just something I found in my old econ 101 book. Good old Keynesian Theory = short term while Classical Theory = Long Term 2+ years.

Why would people buy more lindens if not to spend them? There are only two reasons I can think of to buy lindens, 1) to buy things and 2) because you think you can sell them for more later. I don't think it's too much of a stretch to suggest that because demand for lindens has increased dramatically over time, that demand for clothes, skins, animations, gadgets, toy and most everything else has also increased over time.

I've shown my evidence that demand is increasing. Please show me yours that demand for products and services in SL isn't increasing.

I guarantee that demand for Lindens now is greater than it was 2+ years ago. I triple dog guarantee you that people spend more USD on Lindens now than 2+ years ago. Show me a reasonable time period over the last 2 years where demand for Lindens has declined in terms of USD.

This graph only shows the demand, not the supply to the LindeX. In-world money supply does not help to explain events on LindeX as the last 30 days have proven.

Whilst RDB could be right he's assuming that every new account doesn't become a purchaser of L$ on LindeX. Let's say 1% of them do, and those that do this on average choose to invest US$10/month.

I can't find the number of new users in the last month, but lets say it's as low as 5k. That's still US$500 a month of more demand.

I'd suggest that all three of those numbers are underestimates btw, but what the heck, it illustrates a problem with the assumptions that there's no increase in demand.

As for the idea that the SL economy is only short term, damn right it is. In the last 3 months there have been a swing of changes to the money sources, the rights of LL to "trade" on LindeX and the trading systems on LindeX too. Oh, and some pretty huge change in active population numbers I strong suspect too. Comparing the current trading numbers to the all time high is kind of stupid. My RL lifetime high value of US$ to £sterling is about £1=$4, currently about £1=$2 - social changes in RL compared to SL, trading market changes etc... much less I'd venture to say than in that last 3 months for SL, and certainly way, way less than in SL in my SL lifetime.

What? I never said anythitng about demand for L$ or anything else. I was simply pointing out that in Economic terms 30-60 is short term. 2+ years is long term. Period.

And you've determined this by GDP numbers from SL? Or by the volume increase on the LindenX? Because a volume increase coupled with a declining valuation and increasing money supply is your answer. And if demand is greater now than 2+ years ago, then why has the L$ been declining the majoring of 2006? Increase Demand means less supply. And less supply means increase prices. Which would translate to an increasing L$. I'm not talking about this short term bump, but a sustained long term rally.

You win the argument, until father time shows you this rally is only temporary. But like I'm saying, the fundamentals of SL's economy don't backup the recent valuation run up.

You might think land is a lagging indicator, but then where is the land price rise over the last 30-60 days showing an incremental increase to support the L$ rally?

Don't believe me and rely on your skewed data.. But you will see the L$ fall just as fast as it has risen without any fundamentals in SL to support the increase.

Correct. That is called Consumption or Investment. Either you buy L$ to consume goods/services in Second Life, or you buy L$ to Invest in whatever to eventually turn a profit.

Currently, the investment side of SL is lack luster. Since the financial institutions of SL are a joke, you can't really buy Bonds, Stocks, Commodities (Cept Land or L$).

That means the only demand for L$ primarily comes from Consumption of Widgets and Services. This begs the question, what widgets/services in SL in the last 30-60 days has been the driving force behind the demand for linden dollars leading to its rise in valuation?

Because without an increase in consumption, the demand behind the 30-60/day L$ rise is only temporary. And will come crashing down because nothing fundamentally has changed. Its a hiccup..

This actually brings up a new issue... Why LL hasn't developed a better (Investment) side for players in SL. The Consumption Model can only go so far. Its about time we generated an Investment Side to SL. Which in turn would spark demand for Linden Dollars.

We need the infrastructure to create Bonds, Stocks, Financial Loans, Commodities etc... Financial vehicles which "hold" Linden Dollar wealth by locking up dollars and soaking up the currency float. But LL is too focused on content creation/consumption that it is ignoring a potentially lucrative business model.

Ah why bother? You can get anything from penny stocks to AAA stock at your local stock broker or through any online broker. Second Life is about creating and living a virtual life and not playing silly games with play money.

It is the one thing that really puzzles me about you, why do you bother? Why do you bother to write all of your silly threads you and you alts? Really there is a world of opportunity for you in the real world. Why don’t you go boldly out there and sell short sweat Alaska crude oil on the futures market? Writing messages for investors to sell before it is too late.

I agree, how this can be implemented is above my paygrade though.

Oil Futures, lol.. I do make a few dollars in the Forex Currency Markets..
But regardless, this about creating an economy in SL.. Nothing says the economy has to be limited to pink tshirts and rated-r toys. The economy can also be an investment, which will actually boost the content everybody loves. As more money flows into SL, the more "capital" people have to spend. And they will begin spending it in areas to enhance and/or grow their small business of a store selling skins, to some mega operation paying Slers an income to manage or provide support for their operations.

Somebody might need capital to outsource some scripting code they want because its over their heads. Where do they get that capital? By leveraging their land as a secure asset to borrow against. In return, investors collect interest and trade the secure bonds from the skin factory. Investor's Win, The Skin Factory Wins, and SLers win with better content that has been created for their consumption. A never ending cycle that feeds apon itself..

But, since the Investment Side of SL is being ignored, the Consumption side will never really expand beyond the ability of 1 person. Somebody might be an artist and can craft wonder designs for clothing, but suck azz at coding/scripting and be unable to implement a desired shopping experience for customers. Without money to hire people, this person has to be "lucky" to find somebody to pour hours of their time into a project. And with little if any compensation.

Money talks.... And without investment, SL will remain stagnate with only pockets of the population able to enchance the SL experience, leaving 99% to suffer with great ideas and no paddle to implement it.

Implementation has to come from Linden Labs... There are deep coding issue within the SL world that need to be created to allow these abilities. SL might be user created, but users can't modify the framework of the game.

Take the issue of Bonds. There is nothing that would allow a user to put up their land as collateral in the form of a Bond that they would pay interest over a period of time. And be secure enough to the investors that if the bond issuer defaulted on a payment, the investors could take over ownership of the land and sell it to payoff the debt.

Same thing with loans. Lets say I have L$10,000,000 worth of Linden Dollars sitting in my trusty account vault. How can I loan out this money + interest and be assured the folks I loaned the cash too pay it back?

You would need something hardwired into SL that forced collections of unpaid debts. And the ability to issue investment vehicles that can be traded among SLers through a similar LindenX exchange..

You are silly! I do not think it would be legal for you to operate a bank in sl. These functions are regulated by goverments and they do not like to have their authority questioned. My line of reasoning goes for both customers with and outside of the United States. So you are going to get a license from the state of California to operate a bank? giggle*laugh*giggle

No. Because unless I mistaken, you can make the argument that my bank (Lets Call it The Reserve Bank) is within the Country of Second Life (with its own currency, government, etc). And any licenses I would need would be from the Dictator (King Phillip) to operate a Bank. The State of Cali would have no jurisdiction over my operations.

Now if I build a bank in Cali on Embarcadero and begin handing out loans in Linden Dollars, cashing checks, etc.. Then I would be subject to Cali Law. As well as US Federal Law.

Lucky for me, the banking regulations in SL are few and far between.

Total L$ Supply (L$) 731,508,915


When will this printing machine stop? Up another L$9/million since last week.


You know something, I just realized that LL gave us the data to determine the exact number of Premium Accounts in Second Life. Check my math.


Stipends Paid for July 2006: L$12,323,850
Stipend Amount Per Person: L$500 (Only Premium Accts Get Stipends)
-------------------------------------------------
L$12,323,850 / L$500 = 24,648/Premium Accounts


So in a world of 300,000 Residents, Premium Members only make up 8% of the population.

You know, your assumptions are kinda wrong... again.

Basics still get stippends, as long as they were created before 6/6/6, thus your maths is using the wrong assumptions from the get-go.

Basic-premium ratio is 10:1, and the stippend increase is thus also needed to be worked out in roughly that ratio... which would be 12,324+ premium accounts and roughly 120,000 stipend receiving basic accounts. Corrected for the increase in non-stipend receiving basics adding to the now current 157k active accounts, that would be an estimated 15k premium accounts, or roughly 10%.

Oh, and when you work it all out, the total money per active avatar is now L$4648.34 as opposed to L$ 4925.93 last week...
The population growth is well outstripping new money.

Another day another silly RBD post. Give it up already. Easy to say the rally is dead when its Wednesday when every Wednesday it does this. Perhaps this was a dead cat bounce for the buyers.

I am sorry, you are correct. You are right, only new basic accounts will not receive a stipend. Also accounts which do not log in the week of the stipend will not be paid.


Existing basic account holders will continue to receive their L$50 stipend on the weeks they log in. Premium account holders, both new and existing, will be unaffected.



Thanks for the data Tiger. You just cut back on the number of Premium accounts to 12,324. That means Premium Accounts only make up 4% of the population.

With the active population being about 150k currently, that means it's more like 8-9% and that's assuming that all the basics in there are receiving stipend... so the true figure will be higher.

Stop taking the figures from the correct active players and applying them to total account figure... it makes you look foolish, expecially when caught out doing it.