Linden Value dropping through the floor???

Hiyas everyone (again teehee).

I've been watching the Linden "buy" stockvalue (or whatever you want to call it - how many Linden's you get per dollar) as I'm getting ready to purchase, what is for me, a goodly amount.

In July and half of Aug. I saw it hover around 3 bucks for 800 linden, pretty stable, maybe going up two or three cents or down the same but always recovering. I was planning my amount of LInden purchase based on this, and was just a day or two from buying them as I was waiting for the number to bounce back to the "high" end (Yea get that extra 300 linden for the same dollar amount...)

But then, I gues about two weeks ago it started dropping..and ITS NOT STOPPING!

Seriously! Its gone down 27 Linden's per dollar, 1K is now at this moment two cents under 4 bucks, instead of averaging about 3.30 or so. Just today from this morning it dropped 7 lindens per 1.00 in a matter of 12 hours. 35 dollars (which was about what i was looking at) two weeks ago would have gotten me about 10200, and now doesn't even get me 10K

Um, anyone observed this type of dive before? Before it was pretty stable for as long as I'd watched it and now its just going down down down and hasn't stopped.

I'm hoping it will come back up, but everyday I wait I can't buy stuff - but at the same time it seems like a huge loss to me - when I think maybe if I wait a little longer I'd get like 800-1000 more Lindens for the same amount of money. But every day I wait, its still dropping!

It may not seem like a huge amount to some of you, please don't respond with "spend an extra two bucks geez".

Just hoping that some of you who have watched the buy/sell ratio longer than me, or who observe such things, may have some clue as to what's going on and hopefully, how long it might take to bounce back up .

I was thinking maybe with the forum announcement of closure, or perhaps with school starting back...??? No idea.

Anyway, thanks for the feedback.

I've never seen it snap back this hard.

I have no idea what is driving demand, aside from maybe the increased player base?

One small niggle.. getting less L$ for your US$ means that the value of the Linden is rising, not falling. You may have just scared a lot of currency sellers

I could be wrong, someone who buys L$ regularly or who has been around longer than me would know better. But I believe at one point 20$ US actually bought around 5000L.

Anyway, the current transfer rate might be bad for buyers but it is great for sellers. In the forums if you search threads you'll also see sellers complaining during periods that were great for buyers. Markets fluctuate. Eventually it will go the other way again I'm sure.

It seems to me that the value of the linden dollar was substantially higher before LindeX. However, I would agree that the cause of the rise in value is due in part to the massive influx of new users. Thing is this, not everyone out there is poor, many people can afford to purchase L$. The more users SL gets, the more often people will buy staggeringly high ammounts of L$.

The real beauty in all of this is that most likely, that large sum of L$ that was bought will be spread out amongst dozens if not hundreds of content creators, thus strenghtening the economy as a whole. Those content creators will not be likely to sell the ammount of L$ that eventually made it's way back to them, but instead spend it on improving their product lines.

A better way to see this is, Sally buys money from the L$, and spends it at 50 different stores. One of those stores is owned by Bob. Bob chooses to use the 5k L$ he made on the sale, and re-invest it into new products, and improving his storefront. The value of the Linden Dollar on LindeX rises (price goes down) because the volume (ammount of overall Linden Dollars currently being traded on LindeX) goes down. The lowering of the volume raises the valuation of the remaining volume, by assuming the demand for a market with less product would naturally be greater.

Correct. Early last year the exchange rate was hovering around 250L/1USD, which Linden Lab has stated before is their target exchange rate. It hasn't been close to that in a long time, it's interesting to see it suddenly bounce up so fast.

Somebody out there with cash and/or influence to spend knows something.

It's probably an increase in consumer confidence due to the better stability (i.e. less time dilation issues, a lot less rubberbanding when you go over a sim border, etc) of the new version. People want to buy stuff because now that they have a better shot at using it in an environment that doesn't discourage them and make them want to log off.

Just as an example, if you have a Dominus Shadow, you know it has a zillion scripts and in every release up to 1.11 had serious issues going over sim borders. Now in 1.12, LL has fixed things to where it's much, much smoother. Same thing with something I sell - it used to go into the Twilight Zone for a moment as it went over a border, now it's much smoother.

Yes... quite. It appears that this system, as well as the real-world economy, can be, if is not already being, exploited. Those with very high IQs can see how the economy works and can find ways to exploit the economy. Those with high IQs but not quite as high as the very high IQs can see the fact that the economy is vulnerable, and can find ways to make pyramid scams that relate to exploitation of the economy mentioned above. Those with the average IQs usually see nothing, or just the blurry shadow of the process. And those with low IQs usually fall for the pyramid scams mentioned above.

This belongs in Land and economy, I'm moving it there.

Also the end of the month it's not unusual for it to fall as a certain land baroness tends to dump huge blocks on e-bay in a panic sell to meet her tier. Plus we have tohers who occasionaly hoarde L's then drop huge amounts dirt cheap in an efort to create a panic and push L into killing al in world income so as they think, we wil be forced to buy thier L's.

L$274? That's pathetic.

When it was L$326, certain individuals were screaming that the sky was falling.... now it's the same the other side of L$300, they're remarkably quiet.

When it's L$326 it's "OMG market manipulation", when it's L$274 it's "the free market economy working exactly as it should".

It may well be connected with the drop of stipends, and Linden Lab need to rescue the economy by either raising stipends back to their normal level, or selling some L$ themselves as already discussed, otherwise nobody will be able to afford to play their game.

Lewis

Hasn't it been stated before that for whatever reason 250l/usd is "ideal" exchange rate? I think that the 330s that we were seeing was just an over inflated panic selling on the parts of the seller. Free market will always win. The question is, will the Lindens raise the supply side of the equation?

Currency Linden has been selling on the Lindex. The economy is fine.

Sorry, you can't assure that. It's most likely they WILL sell their L$ to help with the costs of the account. Well...I would!
You don't have to spend all your profit improving your product lines. You usualy use a small part of it, if so. That's what the majority of companies do, in Real Life, and I HOPE, in Second Life, because the same humans that live here, live there, with the same rationality.

As far as my concern, and that's why I sent a post yesterday, there are only 2 ways following the present situation of the linden dolar exchange rate: or LL increase significantly the supply of money, or the economy will halt some point of the future, leading to a market ajustment where the value of the L$ will drop significantly.

The economy is falling apart. The only people who will buy L$ at that low rate are those that have no choice, those of us who can wait and whose existance isnt based around L$ value will do so.

L$250 is not an 'ideal' figure - it's an imaginary figure, plucked out of the air by Philip Linden, and unfortunately people have taken that as gospel because he said it - the same as if it was L$10,000 to the $1 as an 'ideal figure', people would just adjust their prices appropriately.

Where are all the 'experts' now that things are going in their favour? Keeping quiet and laughing all the way to the bank no doubt, only concerned for themselves instead of the majority of the playerbase.

Lewis

If 250l/USD is not good, what is good? Since the increase in the value of the L to the USD, I have notice land prices are beginning to drop again, that is a good thing. I personally don't care where the value of the L$/USD is, as long as it is stable. If LL wants it at 250l/usd and then can keep it stable there, then I would be all for it. It was looking good for a while at about 300L/usd, but then we have another correction and we are at 275l/usd.

A difference is that in SL this doesn't quite work in the same way. Because there are no production costs, you can't really re-invest money into new products since there's nothing to spend it on (possibly apart from in-world advertising). The only real way to re-invest in new products is to use the money to pay yourself for the time working on the products, but this can only really have a notable effect if it lets you displace RL paid work which a) requires a very high SL income and b) requires the L$ to be cashed out.

Possible production costs:

Adobe Photoshop CS2 by Adobe (CD-ROM) (Windows 2000 / XP)
Software: See all 31 items
Buy new: $649.00 $589.99 In Stock
Used & new from $470.00

Here's what I spent on textures:

11106XXXX $10.00 2006-06-11 Paid,No Shipping
11105XXXX $12.00 2006-05-19 Paid,No Shipping
11101XXXX $8.00 2006-02-21 Paid,No Shipping
11101XXXX $10.49 2006-02-13 Paid,No Shipping
418XXX $8.95 2006-01-15 Paid,No Shipping
412XXX $21.99 2006-01-01 Paid,No Shipping

The next purchased texture will be 30 dollars for a new skin I might make. I guess I could surf the web and try to find some images, but the place I go to has High quality images with all the angles needed to make a good skin. Plus images searched on the web don't really give the right to use them. The place I go to gives you the right to use them however you want except to resell them as the orginal.

Classified ads and vendor rentals.

Land purchases and tier fees.

Well one of the first effects on consumers is that land prices are coming down because of this (at least in terms of lindens).

Did you get left out of the Selling Orgy Lewis?

I see it's starting turn the other way. Ya don't suppose that the economy is actually working, now do ya?

Sure looks like it's working to me....

Seems like some of you people just cannot stop trying to manipulate the market moves with noisy BS...

Haven't you gotten a clue yet? It doesn't work, and you end up looking like an asshat
when you're dire predictions turn out to be wrong....

STFU

=B-)

Lewis isn't a currency trader it's just my shoes know more about economics than him.

Do your shoes have any sage trading advice?

=B-)

Buy flats, sell high heels

Those are some smart shoes you have there.