Need for inflation? A stab at a better solution

The most immediate solution most people can see for a rapidly worsening L$ economy is inflation. However this is not the case. First lets look at the case a bit more closely. People have suggested reducing stipends or cutting off stipend money entirely. There's too much money in the economy and its too variable of a solution (depends on newbies buying money to supplement their income) to be much of one. The only solution for this is really inflation, but at the same time how would this happen? An organised cartel of the leading retailers leading the charge? Unlike rl, this is a world where anyone can make anything the leading people do, exempt of capital, manufacturing cost etc. They'd be slashing their own throats. So what then?

Inflation would only set a trend where newbies or people relying on the stipend would be increasingly priced out of the economy to the poiint where they pretty much have to buy money for their income and SL would become There. People would be priced out and will not stay or even sign up.

I see the only solution being land.

1) Don't deprecate the L$ for land fees quite yet. Tweak the fees so that you can pay for your monthly tier with L$ but equivalent to a more favourable exchange rate than GOM. My suggest would be to use the old "par" rate of $L200/$1USD If possible keep this dynamically linked to GOM so that it remains viable. So for example someone on a $9.95 plan to put $2000 back in to pay for their land.

This should encourage some of the excess L$ around the economy to be sunk back in as it offers better value than cashing out at least for now. Obviously people are not going to just keep their stipend to pay their land fees, the majority of people will have needs in the world and this would hardly be the case. Linden absorbs a short term loss in order to straighten out the economy (while they have 8 million extra in their coffers to absorb it), however this system keeps the L$ high, keeps some demand for the big land tier spenders so the L$ can stay viable so they remain able to cash out and keep rolling the USD back into SL like they've always done.

2) Make land purchase L$ only through auctions, and/or all new land to be offered through Linden for L$ only. This will be an attempt to both create a need and a demand for the L$ again and also used as a money sink.

In summary, many people in SL have built a business plan around the L$, especially higher tier members who can only afford those tiers through a L$ with value. This keeps the USD rolling in, the economy requires urgent measures before it really starts to hurt LL's bottom line. The important thing is to keep the economy stable and pumping. Hyper inflation and a worthless L$ will only cause newbies and low income earners to be discouraged, and the land gentry to be unable to afford their land causing not only a death spiral in the amount of attractions and activities in the world but also the loss of many of LL's big income earners.

i agree with all you points there Codswallop, but doing this will only depreciate LL income.. as it is... players r loosing out but LL is gaining, they will not reduce their incomes if they can help it (reducing lant teir prices etc) and they wont stop selling land for US$ as this is extra revenue that they dont have to waste into the sl $ economy.

infusing all this land is all well and good, but eventually we r just gonna end up with crappo builds. shouldnt they use their time updating prims, adding new features that will help the economy for the future.... with better features and prims etc in sl, people can make more different things, more ways to make SL$ and then the economy should correct itself. ever since more land has been plonked onto the sl grid willy nilly, the L$ has dropped.

I am not saying add more land, im just saying tweak the existing L$ for land values so that it offers a better rate than what GOM offers, its something people will pay for anyway so it becomes a better deal, and in the short term, take some L$ out of the economy

Codswallop Cassidy

that messes with their bottom $. they will never do it when we already pay in US$ there are threads just about this topic