I don't get it...

After the release of that data, something isn't adding up...

L$ per capita is down
GDP per capita is up
Spending per capita is almost 100% up (in real

The L$ should be going up...

Are we simply facing a credibility problem? People anticipate the L$ to go down so it does?!

Is it because we are expecting the L$ to go down, ( ie like the interest rate is going down (left movment of the IS curve), restrictive monetairy policy (LM up) ). I'm almost ready to blam it on anticipation and lost of confidence in the L$ or 'money run'... IE no one wants to hold L$ so they get ride of it so it's value goes down. (This happened in Brazil in the 90s) what's the term again... dollarisation...

The value's going down because there isn't really anything to spend it on. Land sales are flat now that everyone's renting, there aren't any "must have" items that have come out lately; content creators are simply dumping the money as it comes in back out into the Lindex. There's nothing buoying its value.

This is a really good question - I've puzzled over it some but I don't have any pre-set ideology or preconceptions to explain it.

That leaves just the facts, and thinking.

I'll get back to you if I figure anything out.

I have to say that I've been wondering the same thing... what's come out lately to spend Lindens on? If the drop in the value of the Linden is due to a lack of compelling content, then killing Dwell payments won't do squat to fix it.

PS:
Transferred my votes from a similar proposal to this one.

This is why I've always argued against the single-variable theorists. I think the real truth may be there's a myriad of causes, some economic, but some psychological, other in-world factors such as Lordfly suggested... sometimes I think even a particularly bad update, or lag could be a factor, if it's reducing the desirabilty of SL enough could lead people not to buy Lindens. Human behaviour is rarely simple.

GDP as applied to SL is only slightly less meaningful than in RL.

In RL, if we have a fender bender, the GDP goes up by the amount of our repair bills even though nothing of "value" has been created only restored to its former state. In SL, if I give you L$1000 because I think you are nifty and you give me L$1000 to stay away from you, the GDP has just gone up by L$2k even though absolutely, literally nothing happened - all wallets and inventories remain as they were.

And what LF said.

I still beleive their are several big players that would like to see the value of the $L remain low on Lindex.

By placing these large holding blocks they insure that the smaller sellers will leap frog their positions, thus devaluing the $L more.

Lack of confidence of course plays into this, if people were confident the $L would recover quickly from these holding blocks, they would likely not leap frog those positions.

That or I am completely fucking nuts and have no clue as to what I am talking about. ***shrugs***

I know this is true of me, I've lost the knack since about October last year. Creativity waning. Damn management germs.....

Alice: You have drunk from the cup of management.
Loud Howard: NOW YOU'RE INFECTED.
Dilbert: What are you talking about? That's ridiculous.
Wally: Soon your technical skills will evaporate like the fine mist on a summer lawn.

Ya it's not my prop, but I would find it really usfull!

Ya I think it's anticipations in general. People don't trust LL, or anticipate LL to boost the L$ in anyway. Philip should take a 'Greenspan' role, say all is well so everything goes well. That and what LF said

The actually hits on a point I've always harped about.
There are no "investments" in SL to lock up L$ from being
sold on the LindenX.

If somebody gives me L$1,000,000 because I sold them a widget,
what are my choices to do with that cash aside from selling it on
the LindenX for USD? There are no Bonds, Stock Markets, Commodities
to stockpile, etc...

Once you own a plot of land, built your prim house/store to your liking,
an acquired all the cool widgets in the game, you are done. You have
nothing to spend your money on, just sell it on LindenX and collect your
USDs..


If LL could develop ways of in-game investment vehicles, then people
would invest. And to do so, they would create a demand for L$, causing
the price to rise.

Struggling to find your relevance in the post dwell world?

Fade:

Forget about Dwell. That is nothing more than a handout.
What I'm talking about is creating Investment Opportunities in SL.

Allow players to issue interest paying bonds on their land as a
possible investment spark in SL. A player issues a Bond for
L$100,000 against their land for 1 year at say 8%. So over
the course of the year, that player pays off the bond, netting
the investors (bond buyers) L$108,000. Who in turn trade the
bond among themselves for a price over that year.

If the user defaults, their land is revoked and pass onto a 3rd
party for sale. The proceeds of the sale are paid to the bond
holders.

So from the player side, they can receive investment money and
use their valuable land as leverage in the short term. Maybe use the
money to pay scripters to create cool new content (ie: Tringo).
The investors pile in to gobble up those bonds to earn cash over the
long term. Throw in a couple of safe guards to make sure nobody
screws anybody and boom. You'll have an economic boomtime on
your hands. And its a Win-Win for everybody.

And best of all, since everything is quoted in Linden Dollars, folks have
to "buy" Linden Dollars to do business. Sparking a demand for L$ and
pushing up the valuation. Having a similar effect of making the
Linden Dollar a Reserve Currency like the USD....

It was never a thought of mine to forget RBD.

I think the Lindex exchange system is partly to blame for this. Many people like me who only occasionally sell and buy Lindens, didn't realise that you could set your price with the new system - they automatically accepted the price that the system filled in for them. I know that has changed now, but there are still a lot of occasional traders who are simply going to accept whatever price is filled in for them by the system/LL.

Myabe that doesn't have an immediate impact, but I think it will have a gradual one, whichever way the system is set to react.
Cali

I've been thinking that something like this would be great. I'm sure many people are thinking smilar thoughts. Although, I was thinking about an exchange that was more like penny stocks for smaller RL companies. Of course significant due diligence would have to be performed, but talk about an enormous economic boost.

Wanna hear what? Only a theory:
Look at last 4 months' data(whatever data you have.)
You wont believe me but there is only one reasen for the current L$ low value:
Telehub land buy backs.It was the activation energy for the L$ value drop.

When i looked the data i saw something, there was a magical balance between L$ market stock and L$/usd rate till telehub land buybacks, Then...:
1-: P2P announced.
2-: People cried
/130/6f/73873/1.html
3-: Some told them not to cry :
/130/6f/73873/4.html#post799125
4-: LL offered buy back with EXTRA CREATED L$, not with USD :
/3/32/79899/1.html
5-: Telehub land owners sold their telehub lands, and converted this extra L$s to usd on the market.
6-: L$ value dropped fast : People told different reasons about it. But it was about overstocked lindex because of extra Telehub buy back L$s at this month.
7-: People lost trust to L$ value.
8-: L$ stock at the market normal at the moment but there is no real reason to gain value again if LL doesnt create an artificial reason:
Dont accept sell requests for this weekend(i never suggest).Possible results:
Pink one : L$ gains value ad everything will be better
Black result : Trust to L$ will decrease more and people will start to think: "what if one day LL blocks sells for a month?Where can i sell? omg SELL NOW?!?!"
Alternative solution? Maybe a slow one, reduce L$ stock at the market(cancel dwell payments(done), more sinks etc). I am not sure about this one's success. There is no real reason for L$ to gain value again.
So, maybe we will be able to start to learn with 300/usd value, it will damage some residents(especially land business people) for months, it will damage LL(less sim sells etc.). It will be a long and hard way to walk.

BTW i dont agree with supply/demand comments, there are many REAL economical value in SL: chat, sex, advertisement opportunuties, fun...
AND,
LL, if you decide to buy back things again please buy with USD if you can, if you cant, just dont buy back.
LL must understand one thing: L$ is not free, and must be managed carefully. Unfortunately all residents paid(less income(devaluation) for business owners, lower stipend(devaluation) for all residents,Cancel of dwell(devaluation)) for the telehub land buy backs, Not LL.
But it was not LL's fault, they are not economy professors, they couldnt guess, their first business is creating a wonderfull virtual world platform and they are doing it very well. But when it comes to economy, please be more carefull.

I think being able to buy plots of land directly from the Linden land auction with $L like we used to be able to do would be the one and only shot the economy needs.

Perhaps for people who have been around for a while, who look at their lindens as income, there isn't much as far as content to buy. But someone likes what they see. GDP is way up, so someone feels there are worthwhile things to buy. I'm guessing that the new player today sees a heck of lot more "must have" things then the new player a year ago or two years ago.

If you dont remember , on or around April 1st, Anshe Chung sold over $50,000 USD worh of $L at an extremley low rate... it will be at least another month before the market stableizes again is my guess... I am also thinking she did this to try and encourage others her A$$ was a good idea...

Precisely. I think a lot of people are just looking at it as a 'Quick Cashout' rather than a long term investment. Add the fact that there is a major update coming up, a lot of people are cashing out now, rather than bank it against the next update creating a new rash of "must have items."

Of course the flip side to this logic is that after 1.9.1 there might be an influx of buying L, as people realize that there are things that have now become 'must haves.' (That'd be logical, but heck, when has economics ever responded to logic?)

I'd pay upwards of L$3000 for a blindingly good Ythrian (from People of the Wind) avatar.

And she bought a bunch of sims at the same time. You can see them coming online with some amazing terraforming north of the Atoll Continent now. There's no reason to assume anything more malicious than "she wanted to create some really nice residential sims".

You're right... it was just a coincidence she started a thread about the A$$ currency at the same time.
Regardless what she did with the money, selling $50k USD worth of $L has a big effect on the market and the reason the rates are what they are today.

This is completely false. The rates have been steadily decreasing for *months*. At the most, the the injection of an extra $50k may have increased the volatility of the price in that region of time.