Linden Exchange Rate

I'm beggining to get worried.

Looking the last 90 days of exchange rate we saw the exchange rate fall from like 330L$/1US$ to 280L$/1US$. It's a 17,8% increase in the value of the Linden in 3 months.

This has an obvious consequence. Everything got 17,8% more expensive for all of us that has to buy Lindens.

Assuming that there is a relevant part of the economy of Second Life there is constituted by members that doesn't pay to use the system, we are going towards some kind of a stagnation of growing because we need this members with enough power to purchase goods and/or services.

Either the supply of Linden dolars will have to increase or we will have some sort of stagnation soon, perhaps that starting some kind of swing in the exchange rate, allowing the dolars detentors to purchase more lindens and buyng more goods produced by the Second Life economy.

At least for me, and seeing the graph of the L$ exchange rate, I have no intentions in buying more linden dolars.

What you think about that?

Hmmm, what do I think? I think Trader is a very unusual name for someone to pick for their first SL account. Due to that thought, I wonder what/whose agenda you are backing.

An economics professor once drove 5 of his top students into a desert and abandoned them. They all died. This proves that economics does bot prepare you for life in the real world.

Well I'm not concerned yet... Prior to that I saw it sitting in the 270s for a long time and then it crawled up to the 330 you are talking about. I will tell you this, there were a whole lot more posts of panic while it was crawling up then the very few as it crawls down. I am thinking that perhaps the economy can now sustain some form of LL perk again and perhaps they cut out too much. It really is a very fine balance though. They probably should never have listened to the ppl screaming to cut premium stupends from 500 to 400, I thought that was pretty idiotic...

I'm not sure if I understand you or the relevancy with the topic, but a logical answer would be that I back my agenda.

I mostly sell lindens because I own a shop and need to pay for things like tier and monthly membership fees and such. But even I, who clearly benifits from a stronger linden, can see that such a rapid move in either direction is bad for the economy.

I'm glad I only sell about 10 items in my store, and feel bad for those who have to now re-price every one of 1,000 shirts they sell. And you sorta-HAVE TO reprice items, because nothing is worse, psychologically, than someone coming to your store and realizing that the item they wanted to purchase yesterday for 10$, now is going to cost them 12$.

The problem here isn't how much the linden is worth, this is arbitrary and the market will eventually match up with it. It is a rapidly changing and unpridictable value of the Linden that can cause a lot of damage to the economy. Deflation can be just as harmful as inflation, just ask the owners of the SL banks who must be drinking a lot of mylanta these last few days.

MY 2 CENTS
Brookston

Yes purchasing a shirt at 200L has gone from $0.61US to $0.73US an $0.13US increase. Your finances are suffering that bad? Shouldn't you cancel your internet connection? It would save you far more money.

well, I think it's only fitting that the exchange rate plummeted in a short time that it would rise again in a short ammount of time too.

When the exchange rate was plummetting sellers were told "it's just trying to find it's natural value". I personally think it's still doin this - just you really got a good deal when it was 300+/USD

If you've only been with us since May, you might not know that it was trading comfortably around this point for awhile and indeed, I (in less than a year) can remember when the $L was below 260$L/USD

One thing you might do is watch your fav content creators and see if they adjust their prices accordingly. This may or may not happen with any one peticular seller, but there are many who raise their prices when the $L is weak, and lower them when it's strong.

I run a rental business and have a whole sim of mainland rentals. I remember when the $L was sliding losing over $6,000L in a single month just from the changing value of the $L. I never raised my rental prices and was beginning to get very worried, and am now glad I don't have to increase the $L I charge my tenants.

So I think the $L needs to find a place to settle and wobble in a decent range so that both sellers and buyers can be more sure of the value of the $L.

Well, I don't think that buying one t-shirt is the ultimate desire of Second Life resident's. Put it on a bigger scale, like buying land, furniture and other kinds of objects, to build sofisticated buildings, shops etc, than you will see that a stronger and stronger local currency is not good.
The point is that I think the market will find a balance where everything will be more expensive and/or the money supply of linden dolars should be increased.

If you're new to SL, then you may not be aware that for the longest time LL's accepted target exchange rate for the $L was $L250/$1.00; and this was indeed not only the accepted exchange rate for the larger majority of time that GOM was in existence, but also the accepted exchange rate as quoted by the governor himself at the time.

Matter of fact, the $L trading over $L300/$1.00 is a recent short lived blip in the history of SL that was simply begging to be corrected to the more prevalently familiar $L250/$1.00ish range.

When many of us warned that the recent weakness of the $L would simply serve to raise in-world prices, no one cared because they were too busy having fun taking advantage of the cheap $L. Now we've come full circle, and the time has come to pay the piper.

In reality though, the exchange rate bears little significance provided in-world prices are adjusted accordingly. Just as market forces dictated the rise in prices while the $L was weakening against the USD, they will also dictate the lowering of in-world prices as the $L strengthens agains the USD.

The SL economy appears to be healthy and functioning beautifully as intended. Personally, I have renewed confidence in the SL economy.

Some of us don't set our prices based on the L$ value but based on the product value.

That's one one of the dumber things I have seen written today....

Let me guess.... You just pick a nice looking random number and set that to you price?

=B-)

yes..the "value" of the product changes as the "money" you use to buy it changes...

What use to cost 3 bucks now cost close to 4 bucks - that's a huge difference in "value" of the product in Linden Land...

And so far I"ve not seen any prices change to reflect the downtrend that pretty much started about two weeks ago. Most of the average prices are the same *sigh*

All it means is now the items cost more, even though they aren't worth more...

So? When I bought land it was with the linden trading at about $L260 to $1 US. A lot of sellers never did change their prices as the $L droped from this rate to around $L330 per $1 US.

They took a loss and were patient about it and kind to their customers. It's only fair that it go back up to something more reasonable again.

No, I set my prices to be comparable to the prices I see in other places and yet competitive while at the same time judging the value based on the time and effort I put into the product. To put it simply, I charge more for a gown I spend days creating and a lot less for a shirt that took me a few minutes.

Explain to me how that's dumb. I think it's fair, a whole lot more fair than changing my prices over and over to match an exchange rate.

Whilst some adjusted prices, mine have gone down in exactly the way they went up - not at all. I sucked it up, even though it hurt at the 330 rate without changing prices at all. I've not changed them the other way either, it's a period where it's not hurting though.

I think your entitled to do whatever you like when it comes to buy/sell lindens.

Mind you the flip side, the drop in value that took the rate up over 320 happened MUCH faster than its slow rise again.

And seeing how I didn't adjust my prices when the value was low, I won't be adjusting them again now that it's climbing.

And you assign a value to your time and effort in what unit of currency?

So, you pick a price in L$ based on what others charge for apparently the same product(s) and adjust with a fudge-factor....

And it has, according to you, no relationship to an exchange rate?!

Ok, you may not realize it, but your prices do reflect the exchange rate... You just have a rather clever way of insulating yourself from considering the real value of your time...

Now that you explain it it doesn't sound quite so dumb... It seems like an excersize in studied ignorance.... Which does not suprise quite so much...


=B-)

And thanks to some unknown possible employees bankroll and his bad real estate deals in the real world as a huge bubble bursts..Lindonlab decides to dump Billions of Lindens into the system with noone profiting but Lindenlab.. Best sell that worthless shit now before LL declares bankruptcy and shuts the doors.. I mean..Why should they care about yall when thier Porsche payments due? *Crawls back under my viaduct and drinks some mouthwash*