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Lawrence Linden
Linden Lab Developer
Join date: 25 Jun 2005
Posts: 235
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01-18-2006 15:12
From: Rickard Roentgen One more thing though, you said you're not selling new L at this time. Is it a possibility in the future and if you do, will it be anounced? Yes, and yes, though there are no firm plans to do so at this time. However we're pretty strongly focused on evaluating ways to streamline our business model and also on ways to manage the L$. We're looking at all of our options so we certainly wouldn't want to outright ignore or exclude and option from consideration. From: Rickard Roentgen I know you would be fairly justified in trying to adjust the market, but it would make me a little uncomfortable. It's in our best interests to keep the currency relatively stable, so you can expect occasional adjustments to the economic inputs towards that goal. Our last announced price target was L$250/US$. Cheers, Lawrence |
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Introvert Petunia
over 2 billion posts
Join date: 11 Sep 2004
Posts: 2,065
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01-18-2006 15:24
From: Lawrence Linden It's in our best interests to keep the currency relatively stable, so you can expect occasional adjustments to the economic inputs towards that goal. Our last announced price target was L$250/US$. I just wanted to thank you for your openness and communication. It is greatly appreciated.
Note for readers who aren't Lawrence: yes, I can be pretty critical of LL at times, but I try not to be rabid about it.
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Siggy Romulus
DILLIGAF
Join date: 22 Sep 2003
Posts: 5,711
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01-18-2006 15:27
I think one of the interesting points about the SL economy is that are no real NEEDS - In RL we have lots of things that NEED paying or we're in a world of hurt (rent/mortgage - utilities - food).
The closest thing SL has to that is land - you don't need it - but it certainly adds to the enjoyment if you do.
even then, pretty much all sales - money trading - is kinda like a shell game.. must be a hard balancing act as far as money in / money out of the world goes - how do you go about stabalizing such a place without 'breaking a few eggs' (event funding etc.)?
Just a general question.
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The Second Life forums are living proof as to why it's illegal for people to have sex with farm animals. From: Jesse Linden I, for one, am highly un-helped by this thread
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Ricky Zamboni
Private citizen
Join date: 4 Jun 2004
Posts: 1,080
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01-18-2006 17:05
From: Lawrence Linden It's in our best interests to keep the currency relatively stable, so you can expect occasional adjustments to the economic inputs towards that goal. Our last announced price target was L$250/US$.
I had a quick grind through the market data you posted ( here). Assuming a simple lognormal return model calibrated to the last 30 days of data, I find that in order to reach the LL target price of L$250/US$ by February 1st, the exchange rate would need to exhibit a movement of a full 3.5 standard deviations away from where the market is heading (or, to put it another way, there is about a 0.02% chance the market would go to L$250/US$ naturally). Seems like some *drastic* adjustments will be needed to pump the price back up there.  As an aside, the target price is really an accident of history. For the first year of our existence, GOM traded L$ in blocks of L$250. We chose that value arbitrarily as (IIRC) 5x the starting currency for new members at the time. In order to remain consistent with prices in the other games we serviced at the time, we started the trading at around $1/block. This is where it stayed for a while, and people eventually got used to that value as being somehow "right" when in fact it was little more than an arbitrary choice. We know now that there are other fundamental forces pushing the value toward a lower equilibrium value (i.e. stipend arbitrage). |