Philip Linden on the GOM L$/USD Exchange Rate

Philip stated in the town hall meeting on Wednesday night @ 7 pm PST that LL seeks stability around L$1,000 for L$4 USD.

He said the recent run-up in L$ prices was considered temporary at this time and no corrective action is planned.

Seems to me a good time to cash out of GOM and wait for lower prices.

Philip did not say that.

exact quote...

Jeska Linden: Eboni Khan: My Question: The price for Lindens on GOM is over $4.24. Does LL have any plans to get the price of Lindens back to the $4 level?
Philip Linden: I'd like to see the prices stable, yes.
Philip Linden: They have been trending up.
Philip Linden: We will watch and make changes if it seems needed. Right now they've not been going up for long,
Philip Linden: so I think it is possible this is temporary.
Philip Linden: We will try and be very careful about steering things too much.

Did you read that, dude? I think thats pretty clear.

He said they wanted the currency stable, not pegged at any specific amount.

Your post made it appear as though Philip actually quoted that figure, and that there was more alarm about the price then was actually stated.

Oh, my bad.

While their policy may have changed, the Lindens in the past have explicitly stated that they'd like to see the Linden stable at $4/L$1,000. Robin said this in a Town Hall meeting I was at shortly after the economic changes of early this year.

The Linden Dollar is worth nothing. Nor is anything you buy, create or acquire. Read the ToS.

Cool - I'll take yours as an exercize in worthlessness! Just transfer at your leisure, KTHX.

I was referring more to the fact we have zero protection against some Linden deciding we should be banned for life, taking our 1000USD worth of non-value Lindens and 500USD of accumulated items, as well as 1000's of hours of our own work and there being sweet FA we can do about it. But everyone of us agreed to be treated this way, so I guess it's not up for discussion

Hmm yes.

Less talk, more transfer.

hee hee.

I question Eboni's motives in asking that question.

It may be because she runs the House of Hucci:

http://www.sluniverse.com/pics/pic.aspx?id=6168

Pretty much.

We have all signed and agreed that our content can be erased, trashed, taken away, or our access restricted to at any given time.

I keep hearing talks about how we can create valueable content and earn money in SecondLife, but so far, it seems like LindenLab chooses to treat our assets such as money, cloths, scripts and model-design about the same way Sony treats your level-grinding in EverQuest.

You spent 4 months working on a project with concept design, coding, texturing and modeling to perfection and it got erased because of a server blip, or because you got banned with no explanation or reason? ah well. Too bad. Its not like any of that work had any value to begin with.

And you've pressed "Ok" on that ToS, so its fine, really.

Exactly!

heh. yes. 'server blips'. Like when you come back and find your server has been rolled back to two hours before your heavy coding/building session. Always fun.

Good job it wasn't worth anything and that we'd agreed to it in advance, or we'd have a right to be pissed

Well, if your L$ were on deposit with GOM, they would remain in your account, ready to be sold or withdrawn to your new avatar. Ahhhhh...the beauty of offshore banking.

Uhuh. I'll have to read your ToS one day

anyone know the best sl site to use to sell things..sl exchange..or second server etc..? thx

lol. now there's an innocent question that could spark a world war.

Could you please read what this man has typed, please:

We will try and be very careful about steering things too much

So all this confidence that Philip Linden said he'd keep the ruble I mean the Linden at $4.00/1000 is misplaced.

He just told you, if you were paying attention, that he is NOT going to be careful about "steering things too much." That means he is NOT going to be propping up your ruble I mean your Linden for you!

How could Philip Linden steer things too much? Well, if he really rapidly or grossly adjusted the Linden stipend money supply, i.e. suddenly cutting off all ratings money, or cutting all grants of $500 in half in one week, or suddenly charging $20 per texture or making some other big change like that.

Of course, it's no impossible he'll do that.

Some of the changes they have made, like the curbs on the events board, are in fact controlling business and preventing the economy from heating up too much with too much Tringo dollars floating.

On the other hand, Philip seemed please that the average number of player-to-player transactions was $80 US (I think this is mainly due to land sales but I could be wrong).

I don't understand the GOM enough to see what keeps it going up or down. I just know anecdotally that if somebody puts a giant cash-out $100,000 packet on there for the price of $4.25, there are several things that can happen. Nobody buys it, and others some in and start to tell smaller packets for less and the price goes down. Or they sell smaller packets for the same price and preserve the value and meaning of the $100,000. Then enough people, seeing that value and meaning of the $100,000 packet at $4.25, keep their confidence in the exchange and come and go to it. They buy Lindens, they buy land with them, they sell the land or the articles in game, they come back to the GOM and cash out again. That repeated coming back and acceptance of the fact of the $4.25 valuation keeps the $4.25 valuation.

Interestingly, though I didn't do a scientific check of this, when the land market crashed to $2/M due to both Ryan Linden's letter, Buster Peel's land dump, the TH announcement debate, etc., the GOM didn't really change. Maybe it dipped. Maybe those weren't big enough events over time to affect the GOM.

But I honestly don't understand where players can get off insisting on a stabilized, propped up currency like a golden ruble for petrodollars. Either you want the Linden to be convertible and have value, or your don't. If you want it to have value, you have to let the market, i.e. the aggregate of free individuals making free decisions, determine its value, and not have some authority "set it".

Prok, the Lindens have already said more or less officially that they're looking for an outside economist to act as a kind of Alan Greenspan of SL. (There may even be aj ob posting for it, I can't remember.) That doesn't mean they're going to be grossly adjusting the value of the Linden. It probably means they're going to be doing what the Federal Reserve does: being very careful not to steer the currency too much. He didn't say they weren't going to steer it at all.

That's really very interesting.

<3 GOM

Ah. Here's the article I was looking for (from waaaaaaay back). When Urizenus was kicked from TSO for writing his article on Evangeline and underage prostitution, he had a bunch of Simoleons he had sheltered on deposit with us. When he got back in with a new avatar, thet were ready and waiting for him.

Yes, but if Zeppi Shlegel gets banned... EVERYONE who has a deposit with GOM loses it. Ah, the RISKS of offshore banking!!!

Woot! The Herald turns out to be useful after all!

The GOM exchange rate often quoted is a false one. It does not include the discount rate charged by the GOM for all transactions. If I place dollars into my GOM account, I am charged a fee by GOM. This in turn, reduces the amount of purchasing power I have. The quoted GOM rate needs to be adjusted to account for these fees to show the truth in the exchange rate.

IGE, on the other hand, doesn't charge fees for the exchange of dollars for lindens or vice versa. It has a set flat rate based on how many lindens you wish to purchase or sell. In fact, it becomes cheaper to purchase lindens with dollars as the amount of lindens you require increases.

Currently the average exchange rate to purchase lindens, using the tiers is 211.78463 lindens for the dollar. To sell lindens on IGE for dollars, the exchange rate is 240.80267 to the dollar, which is less than the L$1000/US$4.00 exchange rate that is often quoted for GOM, even without their fees.

Walker, I got all that.

Let me go over my point again.

Phil said he wasn't going to monkey with the currency...much.

I understood that to mean this:

If the GOM is at $4.25/1000 today, thanks in part to the possible overvaluation on the land market of HIS New Continent *cough*, he's not going to tamper with it to force it back down to $4.00/1000. Am I wrong?

That's my understanding what the guy said.

If you don't think he meant that, and meant to say, don't worry if my currency becomes more valuable, I'm tamp it down and make it more worthless for you again
well...ok, you can have that interpretation.

But I heard the man say that China isn't doing so good anymore, even with their 1 BILLION people compared to the um tremendous wealth and creativity and energy of the 20,000 in SL.

Bah. And you're wearing sneakers made in China! How dare you! You should be wearing virtual sneakers made by those SONIX KICKS people!