Should we be worried about the linden currency crashing?

I'm sitting tight on a pile of Lindens, rather than convert them to US dollars, which is what I was planning to do after a land sale, before this all broke with the casinos. Now it appears that if you already hold Lindens, you are in a stronger financial position to buy up some of this casino land when it starts hitting the market (some of it is in my sim, and I WANT it!), since it appears the exchange rate USD to Lindens is not so favorable now as what I already have in my pockets, and I shouldn't cash them out, only to turn around and buy more Lindens at a higher rate (not the mention the 3/5% fee I would have paid to cash them out initially). And not to mention I can act faster to buy land if I already have the Lindens in my pocket (as the inworld land buy doesn't work well if you have to buy Lindens at the same time of the sale). Is this reasoning sound?


What will happen if/when the casinos start cashing out their Lindens to their daily max, to pull out their profits? How will that affect things?Will the Linden to USD sell rate drop?

If the Linden starts really dropping in value, isn't it then to my advantage to sell my Lindens, as a lesser amount of Lindens can then buy a higher amount of USD? Like maybe set up a limit sell order? Or will that force the funds into escrow (like the WSE does), and I wouldn't have the use of them to make inworld land purchases while the limit sell order was on record? Am I understanding this correctly? [side note: I sold all my WSE stock weeks, ago, and came out with a profit and dividends. Glad I did it; I just had a bad feeling about it all. I feel very bad for the people that lost there money in the recent WSE debacle, and I hope that it can be repaid to them.) And I steer completely clear of inworld banks like Ginko. Great idea, but far to risky for me. My bank is called "my alt account!" No interest earned, but no money lost either!]

And if/when they start unloading the casino land, do you all think it will hit the open market, or will they be private deals we won't even have a chance at? One owner I have tried to contact for months about buying a piece of his land has always completely ignored me. I wonder it that will change now? Anyone have any idea how many square meters we are talking about? And what do you predicit the land value per sqm will be? Of course, they will want us to all overpay,j but if we have the upper hand due to a glut, how much of an upper hand do we actually have? At what price to bots and ad farmers swoop in? I'l want to buy high enough to beat that.

Lots to say. Appreciate any feedback or opinions on my assumptions and questions. I'm no stockbroker, or real estate agent, and am still fairly new to SL, so I don't know if I have a good grasp on these concepts or if I am way out in left field. I just know that there is land I really want, in an area that I am converting into public green spaces (most of a sim), and I would like to go into this knowledgeable and well-informed, before I start trying to buy some of that land. If this can be played right, SL community as a whole stand to benefit from large plots of land throughtout the grid that can be converted to attractive private or public spaces.

Princess Ivory

You have asked a bunch of questions that people can only answer with opinions and speculation.

However, one of your questions can be answered with a fact. If you limit-order or limit-sell on SLEx, you can cancel it at any time, and the transactions occur in RT. So, when you put a limit sale in, the Ls become unavailable for use. But, as soon as you cancel your limit-offer, the funs return to available status. This would be the same if you were buying or selling. If you are buying, your dollars become unavailable. If you are selling, your L's become unavailable. But as soon as you cancel the orders, the money goes back to available status.

Princess Ivory has a point.................Buying land your a smarties hehehe

For what it's worth, the buy price has hit 278L$ per 1US$. This is a new high, at least for the last couple of months that I've been watching. It's not a huge increase, but it does seem significant.

Perhaps more significant is that previously, there were typically tens or hundreds of thousands of L$ orders at 276, with millions at 276, and then back to tens or a hundred at 278. These have all moved up 1L$, with no open buys at 276.

What this says to me is that previously, people who didn't need lindens immediately were following a simple limit strategy of playing buy orders at 277, which could take a few days or a couple of weeks to fill. With the shift up, it appears enough people are convinced the L$ will lose value that they've bumped up their buy limits by 1L$.

This doesn't necessarily mean that people hoarding lindens are trying to get rid of them. It could just mean LL deciding to sell at that rate, to avoid an even bigger panic.

You have this very, very backwards.

Yesterday, the best you could expect to get for 1US$ was 277 lindens. Today, you can get 278 lindens. Thus a USD today buys more than it did yesterday.

This also means the Linden has dropped in value (very slightly), since it now takes more of them to buy a dollar.

If the Linden dollar crashes, it will fall to a point where punters perceive it as undervalued and will flood back in, driving the price back up. That's what happened with land in the infamous land price crash of 06, although I think the currency value didn't suffer much!

Yes, but the question is how much do people perceive the Linden being worth now? A major component of the SL economy has gone. Gambling is one of a very things that works in SL as it does in the real world. It is a fundamental human compulsion. There is less reason for people to buy Lindens now one of the major services of SL is gone. Sure any Linden crash will correct itself around the "true value" of the currency. But what if that true value is but a fraction of its prior value?

I'm probably going to hold onto my Lindens so I hope I'm wrong, but I fear people are underestimating the potential impact of this. Maybe they believe all the articles and TV programmes about all the money being made in SL-but a cursory analysis of the numbers actually making money in SL shows only very small numbers of people making money out of sex(partially banned), gambling (completely banned) and land speculation (not banned but dependent on the other two factors to a significant extent). I don't know where LL expects to replace the lost income-maybe they've begun to believe their own hype.

yea ok.............

I think it's unlikely they'll be a crash though. As far as I know (and I might well be wrong):
a) most people who played gambling games did so to _avoid_ buying L$. They might have bought some for a stake, but no more.
b) most casinos that stayed open for any length of time were making a profit, and thus would be selling L$ rather than buying them.

Therefore, what will happen is:
a) the departing casinos may cash rapidly, possibly creating a blip;
(of course they may not. Once they sell their land they can hold the L$ for unlimited time without it costing them anything, and it's in their own interest not to create a crash)
b) the casino game players' relatively small demand for L$ will be gone;
c) the casino owner's relatively large supply of L$ will be gone;
d) because more supply was removed than demand, if anything the L$ will go _up_;
e) money dealers may have already predicted that, and thus will buy up the money sold by the casinos at point a), minimising the blip.

omg i don't think i've ever heard such a load of nonsense!

ok this is so poorly thought out its almost painfull.

Gambleing in SL was a revenue maker for the casinoes, their bascial operational modle was to take a % off the top of any bet (eitgher directly in the case of exploders or indirectly in the case of other games where the odds of you wining Vs the ratio of payout resulted in them Statisticaly earning more than they payed out) then sell thoes lindens back to other people . I suspect the casinoes bascialy were takeing out cash on a fairly regular basis just to cover their expenses. (Teir and whatever they decided to take out for the pocket money) and probably most did not have any big Megapile of lindens sitting around.

Are people not paying attention to the USD spent in 24hrs, it used to be stuck on 1.7m now it is lucky to see a little over 1.2m. It has been 8 days (or something like that) since the ban on gambling, and there has been a 4-500,000 loss in in-world spending daily. At this rate there will be a 12-15 million USD loss in spending on a monthly basis. For those who compare this to every other loss SL has experienced, there is no comparison. Gambling was an industry that our little nation depended to help drive the economy, and unless one replaces an industry with another all our little nation experiences is a loss.


I said spending was down drastically on the third day of the ban, and a few people told me i was over reacting and the economy will rebound(absolute nonsense). I gambled every now and then, but i always respected the contribution that i knew gambling had on SL. Which is more than i can say for alot of those who say that it was'nt that popular and did'nt contribute much. And the many more who thought that the ban on gambling would not effect them as merchants in difrrent industries. With the previously stated monthly loss, yeah it effects you also. I'm glad that some may suffer in sales of their goods. Maybe the next time the Lindens want to ban something, maybe eveyone will realize next time that a ban will effect all( unlike the selfishness i've read in these forums, some forms of industry snobbery), and maybe everyone will act as one.

It's also been 8 days of severe grid problems, with people often unable/unwilling to buy things, so I'm not surprised by that. I don't think you can conclude it's a result of the gambling ban given that factor.

Is there a difference to the SL world economy between money that has a short half-life inworld (Person A adds $50 from their credit card, and pays Person B who then withdraws it back out again) and money that bounces around a great many more times (Person A adds $50 from their bank, buys shoes and a car, the shoemaker and car maker then buy scripts and textures perhaps to make more shoes and cars, while the texture and script designers pay a landlord or buy furniture or other goods, et al through many more individual hands)

I am assuming a lot of the gambling moneys did not circulate through as many hands or "layers" as in other big-dollar businesses in Second Life. But maybe I am wrong, as I am no economist.

Still it seems to be a very major difference on the long term impact of losing one type of business or industry, versus another type.

But, for any reduction in the need for gamblers to buy L$s, there's approximately the same reduction in the need for casino owners to sell them.

To have any impact on the L$ exchange rate, the gambling cash flow can't have just used L$s as a brief conduit between the RL accounts of the gamblers and the casino owners. I strongly suspect that only a very small amount of it stayed in the SL economy for more than a few days, or touched more than those two accounts. Every L$ that followed the direct, "pass thru" path was just an exchange wash, completely irrelevant to the SL economy (although not irrelevant to the economic statistics--which themselves are nearly equally fanciful with or without that stream).

So, the impact to the SL economy as gamblers and casino owners disappear from the economy is really restricted to the *non*-gambling economic activities of those agents. And it seems to me that the "true gamblers"--the ones who will actually leave because they see nothing to do but gamble--were contributing to that tight-loop gambling economy almost exclusively, so their exit will have negligible impact.

The casino owners' exits probably have more impact: they'll try to sell the land to tier down, fire anybody who worked for them (but not that many are needed to run a casino--many ran with no employees at all), and leave the game, dumping L$s in exchange for RL currency. But partially offsetting the sale of L$ generated by casino land sales are L$ purchases made by the land buyers to fund the buying. It might actually be a pretty large portion, because after the land is bought, the buyers will incur development costs, too, an effect accentuated by the fact that the smart money in casinos has curtailed investments since the advertising ban, if not before.

Indeed, the advertising ban itself may have depressed the value of the L$. Because casino properties couldn't very effectively use classifieds under the ban, their spending was likely less than will be that of the succeeding businesses; so, once the successors are up and running, it's likely that more L$s will disappear to that sink, causing the L$ to appreciate (all else being equal).

It seems to me that more money flowed in and around different industries (much more than people want to admit), due to gambling. Again, the drop in USD spent is dramatic because of the gambling ban. This 4-500,000 USD drop started when gambling was banned. If you subtract 12-15million USD monthly, you should see a sharp spike in the value of the Linden. The thing that gets me is that people still "down play" the power the gambling industries spending power. Due to the statistics of USD spent, it should no longer be an arguement.

Who says casino owners cash out immediately. Did they go shopping for houses and clothes like the rest of the residents? Did they purchase new skins and jewelry? Did the winners at these casinos go on shopping sprees when they won? Did leave dancers tips at clubs? My point is that there is alot of money missing from the economy, due to an industry being eliminated which will naturally shake the value of the Linden.

US$ spent is a fictional number: it's the amount of L$ transferred in-world only, divided by the average exchange rate. There's no actual RL money involved.

If I hand you L$2.66 million and you hand it back, we each just "spent" $10k US and the US$ spent increases by $20,000.

US$ exchanged is the number that matters and it hasn't really moved significantly one way or the other, and the L$ has actually strengthened slightly against the US$.

don´t worry. if the L$ goes down too much LL will install their "destroy no copy items" feature for a week or so and people will need L$ to buy them again

If you think things are real bad what about us who lost in ginko MAN WHAT A SCAM..

Ginko Financial ATM: There is L$3,768,669 pending in the withdrawals queue.

Ginko Financial ATM: There is L$3,798,169 pending in the withdrawals queue.

Ginko Financial ATM: There is L$3,808,365 pending in the withdrawals queue.

Ginko Financial ATM: There is L$3,812,378 pending in the withdrawals queue.

this was withen about 10 min time more was asking WT????? they sounded like they had money now were is it????

seems more people than i ever imagined have been hit by this, a "class action lawsuit" could be in range ?, but i still find it unbelievable that so many people trusted so much money to a unknown party, with no disclosure what so ever !?

To me it seems the linden market was suprisingly calm in the face of the gambling ban and a week of major grid problems. There was a day or two where you couldn't buy lindens in game.

The price briefly went to 278, but is now back to its usual spread. I trade lindens and I had to actually pay attention to the buy sell prices for a few days, but that was about it.

Seems to be back to normal now.

LL has kept the linden extremely stable!

My hat is off to them.