Payday and Up Another L$12/million

The Majority of Premium members aren't making money because
they don't know how to make money. Those who do, are making a
killing... Sorry you aren't skilled in the ways of economics...

Yes it's true. There is one of 'these' types of threads everyweek. ..with good reason.

Fact is the L$ is dropping to all new lows and records each & everyday..the announcment or even hint that LL will be selling L$ in the future created the latest panic sellers all outbidding each other trying to grab what they can before its worth nothing not realising theyre the ones making worthless.

But the bottom line is 95% of people dont see or care about what goes on beyond their own front yard...they think about now and themselves. Period

They dont think about ' oh if this continues I will be playing a part in making the L$ worthless' They think ' F this! Im grabbing what I can ...NOW!!'

I fail to see why LL made the comment about selling....either do it and make it official or dont even hint? Did they not realise it would cause JUST this?

Even I have to say whilst I respect their knowledge on game marketing and virtual platform creation, they SERIOUSLY need some kind of financial dept or advisor.

Each day it sets an new record for the lowest value amd its not as simple as ' ppl arent making anything new' Im sorry but thats rubbish! Ive seen so much growth in SL regards to what ppl are able to make & do.

Ideally all content sellers should increase asking prices when the L$ drops below a certain value, I have increased my stock twice in this last 7 mths based on the dropping value of the L$. Its only fair. The buyers get more L$ for their $ and I get less for $ for the L$.

If everyone increased the price of things the balance would restore.

But that needs mass co oporation and its never going to happen, there are in world competitions too...ppl under cutting their competiitors to attract more customers

People pouring money into camping Zombies ( is that a good or bad thing for the economy I cant figure that one out )

LL SHOULD start selling and do it quick as they are the ONLY ppl who can control it by setting a 'marker' other will lead by. Right now its just a load of panicky people with no long term vision other than what they can get 'today' for their million.

If you look at There.com who sell the Tbuck. The Tbuck simply does not fluctuate like this

Its always steady and thats because There.com sells it and 3rd parties slightly undercut it and thats it. No one needs to go silly and panic sell...

I hope LL have decided to sell L$ and stop playing with words

'We are NOT selling L$ but if & when we do we'lllet you know how much and the price'

LOL??

LillyBeth Filth knows her stuff... You should listen up Jonas..

Why? I don't cash out, if anything I will LOWER my prices. I get more $L for my USD$ and the same USD for my L$. That would be NONE. I'm in it for ingame currency and the amount you have to sell to make a USD does not bother me in the slightest.

I won't increase prices, I may lower them.

Quit thinking in terms that everyone even -wants- to cash Lindens out. I certianly don't. I just want to make a little in game money to spend in game.

Ideally, people would quit trying to make their living off of SL in my mind..

Jonas this isnt the 1st dogmatic reply ive read from you. You made one about texture thefts saying ' you would do the same thing' ' and ppl in SL who sell their work for L$ are ruining it' blah blah

And I said then in that very thread ' I bet your all over the forums annoying the Hell out of ppl with your provoking narrow minded ' it dont effect me so F*** them!' attitude.

So I ask.

As this CLEARLY does not concern you WTF are you even here for?

Why should you think ppl give a S*** about your opinion when your not involved in the subject matter of any of the 2 threads ive seen you in recently?

I get the impression if a debate broke out about which panty liner was more absorbant you'd probably be screaming your opinion there too!

Ever heard the word 'Objective' are you even capabale at looking at situations from both sides even if your not personaly effected by the subject at hand?

As you have no experience in a) making enough to sell or B) selling L$... find a thread you actualy DO have some experience you can share ..maybe then people will take your comments seriously...no matter how 'one sided' they are.

NewsFlash:

The world doesn't live like Master Jonas...

The rest of SLers who pour hundreds/thousands of US dollars into
SL for land tiers are looking to recoup their money in the form of
profits earned from widgets/services they provide. If the Linden Dollar
declines, it negatively effects the ability of those folks to break even.
As such, it puts them into a position of providing widgets/services
for the benefit of everybody at the expense of their own pocket book.

Yes, some don't care and they have no problem shelling out hundreds or
thousands a year and just getting the joy of painting out of it. But the majority
want to break even or profit. If they can't, they'll stop trying. When that happens,
content will begin to vanish from SL.

So think of others, not just yourself and/or what you want SL to be...
Because in reality, it doesn't follow your game plan.

Live like Master Jonas?

Oh hell no!!!! I want my Porche, my vacation house, AND my Starbucks. I ain't no clueless hippy.

Its all about the Benlindens baby!!!!!

I've been able to make teir for me and my sl wife for the last 2 months running. We just haven't sold the lindens. No experience? Hardly.

I also have a place here defending the stipends, as its the undercutting that is hurting the lindex, not stipends. Cutting stipends will only tank the economy.

Perhaps you should find out the facts before you assume.

editted because trolls can't understand english:

Perhaps you should find out my finncial facts from me, about what I earn, etc, before making assumptions.

I believe you make a RL living in SL ? I'm not sure I understand. If LL sell L$ then why will anyone buy them from you ? How will you ever convert your SL income to real world currency ? I'm pretty sure LL won't be buying them off you, they've clearly never believed in paying for content themselves.

Yes, but you are talking about solving the problem by making it harder for consumers to get the stuff (by effectively charging them more for it). For people to support your solution because they want your stuff would be self-defeating for them.

FACTS As Requested:
================


a) Inflation is an increase in the money supply.
Source: http://en.wikipedia.org/wiki/Inflation


b) 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 currency and credit beyond the proportion of available goods and services.
Source: http://education.yahoo.com/reference/dictionary/entry/inflation

Now I'm interested... we can pay tier in Lindens ? If I didn't need to sell the L$ to do it I'd be less concerned about the rate on Lindex too.

Zimbabwe
At Independence, in 1980, the Zimbabwe dollar was worth about $1.50 US. Since then, rampant inflation and the collapse of the economy have severely devalued the currency, with many organisations using the US dollar instead.

Early in the 21st century Zimbabwe started to experience hyperinflation. Inflation reached 624% in early 2004, then fell back to low triple digits before surging to a new high of 1,042.9% in April 2006. [4]

On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 21 trillion in order to buy foreign currency to pay off IMF arrears.

In early May 2006, Zimbabwe's government began rolling the printing presses (once again) to produce about 60 trillion Zimbabwean dollars. The additional currency was required to finance the recent 300% increase in salaries for soldiers and policemen and 200% for other civil servants. The money was not budgeted for the current fiscal year, and the government did not say where it would come from.

So you think LL would create a situation were evryone in SL who is here making L$ to sell to cover their land fees and acct fees and mortgages...the very things LL advertise in their Marketing materials , were ppl were suddenly stuck with toy money? The whole purpose and reason for opening an acct goes down the pan
People here creating stuff that attract new accts stop creating....sell their land...store leave the game...

The whole virtual world grinds to a halt except for those few who 'play' but they arent the ppl LL are wanting to attract are they?

LL need $$ flowing thru this world or else it wouldnt exsist.

Seriously?? Think it through from their point of view...according to you theyre trying to bring the whole economy to a halt....and the reason would be???

They are BUSINESS ppl they NEED regular payments of L$ and would be idiots to think stopping those ppl who make & sell for L$ will bring them more wealth. It would end the game...they havent got this far by being complete idiots.

As i say look at There.com they do the same thing. They sell Tbux. Its still runnning , people are still making content and selling Tbux I know a few personally.

Think thats says it all really.

Like any rented/owned server resource, simply paying for the server(or land in this case) does not guarantee that you will recoup your money without having a damn clever strategy about how to use the thing. Making money and being successful isn't easy, despite what the 90's .com hype and the "get paid to surf' schemes from that era would have you beleive. This stuff is really analogous to the web in the 90's I think, in that alot of people are using this "eyeballs + ads = profits" strategy that was proven to be hollow back then, and that alot of people are expecting to rake in cash by doing stuff that many people simply don't find valuable.

What seems is happening to me is that while the value of linden$ sales is decreasing for sellers, eventually it will reach a point in which the Lindens will find it in their best interest to take the stipends out of lindex purchases rather than creating the money. At some point it may be that buying the stipends off the lindex costs less than the premium fee, at which point they would make more money by getting their lindens there instead (they could always create more money beyond that threshold to further increase their profits by exchanging money this way, but would have to balance that with the need to keep SL's entrepeneurs from leaving the community). Then we have the basic stipends, which could be bought off the lindex and considered as advertising expenses once the value passes a certain threshold where it makes more sense for them to do this than to create money.

From what I notice, it seems that the dollar to linden ratio still has more room to climb before it is in LL's favor to stop creating money. I imagine that they will do what they need to do in order to stay in business for as long as they can. But to remove stipends altogether I think would rock the economy and end up in people being a lot more tightwadish with their money, making them not nearly as eager to buy stuff. Most of the content in SL consists of impulse buys and luxuries which would not make any money if people didn't have disposable income, like in a time of hardship or if their stipends were taken away. People need spending cash and it has to come from somewhere, I imagine in the long run this stipend will come in the form of LL automated lindex transfers but if LL tried doing that now they would lose money, thus they continue creating more until the time comes when the value is such that they can afford to back the lindens with dollars. We will eventually see a stable curency, and if it fluctuates the other way towards dollars not getting very much L$'s then they could sell them at whatever price they want with this new TOS clause they added.

It looks to me that LL have the tools they need to keep the value of the L$ under their control, and will use those tools to suit their interests, although their interests aren't always aligned perfectly with those of SL's other businesses(especially in this transitional period), which is an issue that may one day be resolved if SL goes open source like they keep saying they will.

I feel like things are under control and we have no reason to worry, sure it drops now but at a certain point LL will have a way to make money and hold the value at the same time.

No really I don't and I agree with everything you wrote but I was saying I didn't understand how them selling $L would benefit you. I can't work it out that's all.

They've said they'd sell them if the game needed them, fine. But at the moment we have the opposite problem, too many Lindens, not enough US$ for content creators like you, that's what was so strange about their announcement, other than being profitable for themselves, I thought it was the solution to quite the opposite problem we have at the moment Whether they start selling them now or not, the exchange rate will worsen for you.

Reserve,

I like your posts, they are well thought out. However, one thing that can't be ignored is the (hopefully) growing population of active players on SL. If the amount of players is constant, then an increase in the money supply is inflation, pure and simple. But an increase in the active population without an increase in the money supply is just has bad as inflation, especially since LL said their goal was a 10 fold increase in population over the next 4 years.

You probably know all this already, but for the sake of clarity in this thread, I thought I would interject.

Finally.. some people actually talking about issues instead of waving hands!

Okay the way I see it... in RL, Inflation is undesireable because the cycle of money from reserve to banks and government sponsered programs to employers, to employees to merchants, to venders and back to the IRS can be lengthy. From beginning to end can take months, and end of year taxes are paid in US$'s of different value than those US$ were earned. Not to mention savings accounts, pension plans etc and things we don't have (or need) in SL.

Not so in SL. Stipend -> Spender -> Merchant -> Lindex -> Spender -> Merchant -> Lindex -> rinse repeat..

The devaulation that occurs during this much shorter cycle encourages the people that care about the value of their L$ to cash them out quicker. Bonus for LL because it brings in Lindex fees.

Unlike RL, in SL, people aren't investing in retirement pensions, or saving up to put kids through college. If they have a stockpile of unused L$ it's because they haven't found something to spend them on and have no overwhelming desire to cash them out. And so... they devalue in place. Are they hurt by it? No... because as those L$ devalue the person is getting Stipends that bolster up the quantity of L$ in their pocket over time and it more or less balances out, even though I see no reason why it needs to.

So, who is really being harmed by the constant gradual decline in value? (except, perhaps, people trying to play the banker game in SL)

And why is it worth everyong giving up their stipend to protect them? How will SecondLife benefit in the long run when a handful of players can far more easily start mucking with the currency valuation for their own profit?

And at what point do you think the current system falls apart if nothing is changed?

I don't see any reason for the L$ value to stop sliding. It can match the rate that stipends offer and some may opt to stop paying for premium and buy cheaper L$'s from the Lindex when it passes L$350.

People have pointed out that when landlords/barons can't make tier by charging in L$ they'll charge in US$ or raise prices. Yes? So? The PRICE in US$ isn't going up for rent or tier payments.

I really do want to believe that there's going to be some ultimate consequence to the declining value of the L$... but I'm just not seeing it. There are many larger threats to the success of SecondLife than this.

Please... give me a plausible and likely world-killing scenario if nothing is done.

No CJ. I've had enough lindens to 'cash out' to cover teir. I didn't sell them. I paid for my teir and use the in game currency to do soemthing shocking: have fun with.

You can't make people buy Lindens because they don't have to come here at all. If they have to buy Lindens for US$, a lot of them won't.

Now is a great time to be making money in SL I think, because if that value does pass the threshold and money stops being created, that means we currently have a better ratio of L$ exchange which allows us to make a profit off of just selling our stipends, which won't exist once LL stops creating money and the currency stabilizes. Once the currency stabiizes I think businesses will be in much better shape, and at the moment we are in a phase where its too easy to get money for nothing, but it is a neccesary evil to bring more spenders into the economy. And More spenders in the economy is better in the long term than shutting them out now by removing stipends.

I'd say that the short term solution is to fluctuate prices with the lindex rates, while at the same time balancing that with competitive prices, removing stipends is only in the best intrests of SL bankers, but it looks to me that LL would rather be the bank instead.

If the ratio gets past a certain point it will be feasible to take stipends from lindex transfers, which could happen just as automatically as today's stipends, the only difference being where the money would come from.

The currency can stabalize -with- the stipends. It just takes a concerted effort to stop the undercutters. As far as money for nothing, I'm not getting anything for nothing. I pay Linden Labs and as part of my agreement, I get lindens weekly.

Watch the basic stipends and undercutters if you want to deal with a blance.

You obviously did not read everything I wrote, because I not once suggested that stipends were a problem.

What I did suggest is that there will eventually be a point where LL would make more money by taking stipends from the lindex by spending the fees you paid them there instead of creating the money. I mean money for nothing in the sense that today we can take our stipends, which we got by *doing nothing*(in comparison with tranactions from other ressies) and sell for more US dollars than would be spent in taking a stipend out of the lindex after the "inflation" ends. So we are at an advantage compared to people who will join the game after LL stops creating money.

So, here is the solution actually.

Everyone gets free membership.

Everyone gets a minimal stipend.

Anyone who wants to buy land, ads, etc. pays for it in Linden dollars.

Anyone, including Linden Labs can sell Linden dollars, but Linden Labs won't need to buy them because they'll be getting all their tier payments in Linden dollars.

They'll get their US$ cash because everyone will have to buy or collect enough Linden dollars to pay their tier.

This way the big land owners won't have to cash in Linden dollars, but their tenants will be buying the Lindens to pay their rent, if they aren't able to earn enough. On the other hand, folks who want to play for free will still be able to do so, if they are able to earn enough Lindens to cover their costs.

This would reverse the demand for Linden dollars, probably creating a currency shortage, which Linden Labs can remedy by selling more Linden dollars, keeping the value stable and thereby also making more cash.

Seems like it ought to work.

The main drawback, of course, is that if there were temporary shortage of Linden dollars to buy, folks with huge tier payments would have to pay premium prices for their Lindens, so Linden Labs would have to make sure there are enough Lindens on the the Lindex to cover everyone's payments at any given time.

The danger of this would seem to be that people who had lots of Lindens left after paying their tier would start selling their Lindens to others for US$, undercutting LL's price. This has already happened on IMVU.

The second problem is that if one or more "big land owners" could be earning their tier by selling large numbers of items valued at less than the stipend. In this case, LL would have to host the sim for free because the land owner isn't paying any US$, and neither are each of the individual product buyers.