Why the Panic?

Wow... first post in the Economics forum. I'm special!

Seriously... I've seen so many doom and gloom posts about the L$ dropping through the floor. I don't get it... why does it seem that a small group of people want to encourage panic selling? Do they want to buy them all up from GOM or something? What's the deal?

Excellent!

Third time's the charm.

My perspective on SL is that of friendly explorer, so I really treat Linden dollars as fun play money -- it's not TOTALLY that, obviously, but I don't think panic is a practical way to react in any case because shaking in your boots won't raise the value of L$. I understand how this is of concern to those who make considerable profits through SL. I have many friends inworld who do just that, from fine fashion designers to prolific builders.

You'll have as many answers as you have people you're asking the question to.

Freaking out doesn't do good though. It's illogical -- I don't want to see some sort of herd mentality where we're trampling all over each other, pushed on by some oncoming fear.

For some people (including myself actually), they see the economy as a game. In RL you can't go around manipulating markets without bringing wrath down on your head or risking significant capital. But you can do this safely in SL..

So, some people see manipulating the SL market as merely a game .. and why not? It's interesting to experiment and see what happens.

However, once we recognize this we can also see that we can come up with new rules that make everyone happy but also reduce the ability to manipulate markets.

Coming up with those rules is kind of a game in itself.

For example - we came up with the rule of the economy forum which should reduce certain people from manipulating the market by reducing exposure to their posts. It's now there turn. Let's see what they do!

It should be fun.

I know this topic has been covered in a few other posts/threads, but I see things from different points and come up with theories. A few weeks after I joined SL I discovered what IGE and GOM was. I used IGE at first because I heard of it first. I got my first delievery from a IGE Wheeler and then saw how much Linden IGE Wheeler held on the leaders board.

Soon after I was told about GOM and how people could sell and basically set there own price according to the current exchange rate (give or take). I thought that the IGE system was actually a benifit to the SL economy because it had such a huge amount of Linden locked up thus keeping inflation down. Unless you knew you could buy Linden from IGE the money it remainned in locked up.

With all this Linden locked up the Linden dollar was strong. Just like with any currency the less there is the more its worth. Along comes new players who use their real world wealth to buy their status in SL. They buy up hundreds of millions of Linden and run about dumping it and being sucked on by leeches. All of a sudden the once locked up Linden is now circulating and everyone with their new wealth curtiousy of the Newbie Tycoon rush to sell the Linden for real dollars thus killing the Linden exchange rate. So the next time you see some Newb account throwing Linden about like its no bodies buiness realize that your new wealth will indirectly lead to your future downfall.

However with the Linden dollar so weak we are now seeing the price of things in SL go up. Will people bring up their price to match the Linden dollar? If so we can pull ourselves out of this resession?

Is the decrease of the Linden dollar inevitable? If you think of Linden money as a sink. You put a plug in the drain and turn it on and what happens to the water? its overflows... Hence why the US government takes money out of cycle. Will Linden change this? They dont make any money off linden dollar sales but they will lose if there is no recovery of the Linden dollar. It will be playing a game with the cheat code to infinity money (rosebud:;!:!:!:!)

Jenna Fairplay~ I made my thread to get info on my theory

rofl blaze, the idea that certain people mainipulate the market by FORUM POSTS is paranoid and dellusional

OH MY GOD WE'RE ALL GOING TO DIE!!!! SELL!!!! SELL!!!! SELL!!!!

Lot of thoughts in there, kinda jumbled together.

However, one thing that makes inflation difficult in SL is because it's hard to change buy prices programmatically .. so you can't really peg at the USD.

No matter what someone somewhere is paying real money to support the leech game economy and when they get wise to that things happen. And the value right now is due to the rush to leech the average user out of rl dollars but the increasing land finally caught up with the buyers who then basically crashed the market themselves trying to jump ship.

Ugh, it's not a crash, it's a correction. The Linden dollar, prior to the land rush of early 2004, was at or about $4.00/$L1000. Give or take ten cents.

This is not the end of the linden dollar speculation. This is not the end of IGE. This is not the end of GOM.

People don't want the linden dollar as much now simply because there's nothing "must have" to buy.

How about all of you doom and gloom people make something isntead of trying to knock the sky down?

LF

I'm new to SL but done the whole TSO & There.com thing.
In There I set up my own 'in world' business buying & selling players game items and got slagged off to death by certain * failed designers* for it...

i wasnt rich by any stretch of imagination but it meant I didnt HAVE to buy Tbux

I always thought SL currency was peanuts in comparisson to Tbux? BUT since I started playing properly ( this week) unless Im very much mistaken the RL value of the L$ is MORE than the T$!!

This amazed me! Although I 'think' things are cheaper to buy in SL than There.

Its only a comparison but the RL value of the game currency is a concern to all who both buy it AND sell it as it has a direct effect on our gaming enjoyment.

yes it buys status and who wants to look like an ugly avie with freeby clothes? So yes its deadly important to many ppl and not those who make a living from it.

I have a LOT to learn about SL and its economy, i cant see my designing as its already bombarded with clothes stores and building aint my thing.

I used to HATE this game... I love it now