How to save the economy

Sell your L$ at 1 point higher than the lowest.

I tried that. The thing is I couldnt sell.

Yes, and for the people who have a lot of land fees to worry about are forced into taking what they can get. It would take a miraculous number of people to think in the same way and just sell for 1 point higher and stick to it.

I don't believe everyone would come together as a global community to stick to their guns at 1 point higher, even if the "protest" would save the economy and secure their long term possibilities for business viability.
[Edited to highlight the most important message in this post]

I tried it and it sold.

Mileage may vary.

Of course they wouldn't. It's not even worth thinking about whether it would work or not because it would never be done.

To globally conform to this way of thinking leads to increasing prices of products (for example) which earns you more L$ short term which you will have an even bigger problem selling once dumped on an exchange.

Sometimes if a business is doing well it can afford to sustain a small hit if the outcome is long term gain.

I have seen the "short term gain" people in action in RL before and I'm now laughing at the entire country's state of economy. It's a form of greed and it fails completely in the long term.

Streamline your processes, offload unnecessary fixed overheads (too much land for the sake of having it), work on the quality of what you provide and try the 1•+ (1 point higher).

It does fail completely in the long term, but still, nobody's going to do it. Prisoner's Dilemma and so on. I've said it before; it's not stipends or anything like that, it's the fact that everybody's trying to undercut each other. And they'll keep at it.

NB surely "one point lower than the lowest"?

Yes, the wording had crossed my mind. It's all about perspective. I chose to see it as a higher value of the L$ to the USD$. Cup's half full etc.

The very make up of the exchange I suspect perpetuates the dilemma - the first person in line (to sell at a particular rate) gets all the goodies (U$D), and the second gets nothing until the first has eaten his fill. But it get's worse than that - generally you aren't the second, but the nth. Thus the pressure is maxmized to undercut.

On reflection - this means the exchange isn't a clear Prisoner's Dilemma, because you not only get punished for cooperating, the punishment increases as the number of people cooperating goes up.

we need to fix retarded things like that to fix the economy:

"Today's high: L$850 / US$1.00 "

Perhaps if it was at L$1 more (favorable to the seller) from the current average instead of the current least favorable rate. That way the curious folks that sell at L$850 to US$1 wouldn't cause disruptions. Might work even if a decent percentage of folks adhered to it, instead of the unrealistically hopeful "everyone".

Please be kind if I'm completely offbase here because economics is hardly my bag and I've never sold L$ so not too familiar with the process.

But couldn't the Lindens just set the transfer rate to a specific amount, not giving anyone the ability to raise or lower it... Anyone who sells L$ would be selling them TO LL with an immediate sale (no waiting) and anyone who buys L$ would be buying them FROM LL and not from any individual? Am I mistaken or isn't that how GOM did it?

People keep talking about the length of time they think it will take for their money to sell using this "1 L$ lower" idea however this isnt the case. With the current volume of Linden being bought off the Lindex each day at an average of L$7.3million, the value would increase in no time. With only just over L$700K at L$294/$1, it wouldnt be long before the next lower batch (L$293/$1) starts to sell and people could post at L$292/$1. So long as theres no more then L$7million above you, you'll sell before the days end (on average).

No need to fix what isn't broken. An examination of the daily average along with the hi-lo bars shows that such behavior is rare and limited to vanishingly small percentage of the $L traded daily. It has no measureable effect on the economy.

Ignoring the spikes, it's still broken. See "inflation" and "hyperinflation":
http://en.wikipedia.org/wiki/Inflation

My interpretation of the steadily climbing(/falling) rate is that there are more $L for sale than people buy. I don't know how you want to 'fix' that. It would be nice if LL took the money they used to pay for DI and used it to buy some $L off the market (and destroy it) - but they won't.

Alternatively, just use USD as the game currency and be done with it.

LL could fix this by introducing a sink whereby a maximum percentage of land fees can be paid for in L$.

However, this presents a nightmare situation for LL as it becomes harder to track whether or not their hosting costs are being covered by the indirect means of people buying L$ with USD$ and introduces a latency for detecting change. This has the real impact of the RL servers not being properly paid for (LL to suppliers) and could lead to leakage of funds from the LL bank account if not caught in time and rates adjusted.