L$ Deficit Hits L$504,000,000 Annualized!

Way to be realistic.

Let me know when you sell yours at that rate.

Ummm... I guess you intend to follow it all the way down then.

I'm quite serious... I predict at least 316 / 1 by year's end... and 500 / 1 in the not to distant future.

The Lindens MUST get their federal spending in order. We cannot survive these deficits.

Sure, blame someone else.

I agree, partially. I will always index prices to the current L$ valuations, and cash out enough to pay tier. I'll definately be holding profits until after we see what occurs with the L$ post-dwell though. It could magnify profits dramatically.

Ah, thanks for all the replies.

I've got a raging headache so I hope this isn't too incoherent.

I don't think the removal of dwell is going to have a large impact. Stipends are still a huge flood of Lindens into the economy. The removal of dwell might help a little though.

I don't think the sky is falling. I think that a fast crash would probably hurt things. It wouldn't be the end of SL.

The main people hurt by the linden hitting 500 or 1000/1 are the people that rely on stipends. Some irony there, definitely.

Prices will adjust, maybe not all at once. To those who say they don't see prices rising, you have to also look at prices that aren't falling. In my experience, items on SL have strong initial sales, which then taper off. A vendor should ideally lower their prices after a while to get the other market segments (price descrimination). Since the linden is falling, their prices are automatically lowering themselves.

Also, the price of new items coming on to the market will be higher. This isn't going to happen all at once. It takes a while for people to adjust their thinking.

Regarding "undercutting"... I think that's a red herring. Supply and demand dictate price. If there were enough demand to go around, the price would stay lower. People that need to sell now would be balanced by people that need to buy now.

Adding limit orders on both sides of the Lindex should help smooth out supply and demand, but it should have little net effect except reducing volatility.

The LindeX fees are too high to really allow much speculation. If they adopted a pip spread model like SL Exchange (and every real currency market) has, I think we might see more buy side currency speculation which would help keep spreads low.

:wild applause:

Gigs Taggart for President!

As long as LL accepts credit card purchases to buy L$ then they have to offset the cost of the purchases somehow.

Well they could limit to new money coming into the system via a credit card. You could easily carry a dollar balance and trade without ever using a credit card.

Keiki, you and I could but many new users seem to buy using credit cards as soon as they get in the game and make little 500 and 1000 linden purcheses with them. I think that is why LL does this it hooks the new player in small amounts. I made purcheses of $10, $20, and finally $40 before I stopped buying directly on the Lindex when I first joined 5 weeks ago.

The transaction cost (if any) should be passed on to the person making the USD deposit into LL's transaction system, in the form of a deposit fee. Only the LindeX profit margin should be charged as a trading fee.

Agreed.

You're more coherent with a headache, than I am without. I envy you that. (I mean the coherency... not the headache!)

I agree with each point you raised, and particularly like the bit about strong initial sales and the effect of older products being automatically 'marked down' over time.

Likewise, I do still feel that even without dwell there will still be a harmless downward trend to the L$, though perhaps at less steep an angle.

If hyperinflation ever does happen, I'm confident the real cause will be SecondLife's potential new players being drawn away by "the next big thing", whatever that may be.

Obviously, no amount of 'economagic' will be able to correct that. I guess LL just needs to make sure that SL continues to BE "The Next Big Thing".