I undergo to say I don't 100% understand on first reading. I'm not an economist and some of the terms and history the writer glibly throws around are jargon I'm unfamiliar with. That doesn't mean it's not worth a construe with wikipedia or similar to transfer (it would be nice if he'd linked out but he IS writing for a economics institution so probably doesn't need to for the aim audience). This isn't the. It probably won't be the last. This bind uses the idea that SL is continuously running at a calculate deficit to suggest that a come down soft or hard is inevitable. He contrasts the way SL manages its deficit economy with the way the US (and other countries) bring home the bacon theirs - and of cover those RL economies do go and bust cycles most of the measure (the UK has had policies to forbid this for the measure 10 years there is now some suggestion that what we've done is merely delayed it we'll have to act and see) so what is being predicted makes comprehend even without fully understanding it all. This isn't tied to the current eat with Ginko/WSE etc this is a more long term "LL needs to dress its policies or approach an economic destroy cycle" warning. The fact that the compose is a former employee of the Federal keep back come in of Governors and currently works for the Securities and Exchange Commission in Los Angeles lends quite a bit of charge to his analysis too.
2. From the bind:"It is actually the small perpetual calculate deficit that reveals something quite sinister. Unlike L$ sales on the LindeX they do not designate a flow of real wealth into back up Life. Instead they are created by Linden to be wealth but no economic production was involved in creating them. These deficits become when the weekly L$ stipends Linden pays to premium residents exceed its revenues from arrive rentals and other administrative services it provides to residents. In request to finance the deficits. Linden creates new L$ and injects them into back up Life."She stipends are absolutely neglectable. No way tier payments are eaten up by stipends. Since the whole bind is based on that can we do by it as well?Or can someone inform to me where I'm do by - gratify?
3. "She stipends are absolutely neglectable. No way tier payments are eaten up by stipends."Gosh... That should be:"Stipends are absolutely neglectable. No way tier payments are eaten up by them."
4. Also:"If Linden wants to prevent this from happening and advance a shelter growing economy within back up Life it should bear on the lessons of Austrian economics to its policies: abolish restrictions on content alter the ability of residents to compel their property rights and most important tie the L$ to a real-world commodity money backed by 100% reserves."As far as I know most european countries don't undergo their currency backed by any reserves. And enforcing property rights has brought us the RIAA/MPAA vs the common man lawsuits. What is this guy talking about?
5. This article does not furnish up enough data to reach the conclusions it has and ignores a basic crucial fact: In request for a currency to be shelter the be money give needs to change in proportion to the *total* economy not just the administer occupied by the government. In the U. S this growth is provided by the central banks in the create of loans to other banks and from there to industry and commerce. We could probably lay out all day about who really benefits from this procedure but the simple difference here is that Linden Lab replaces the money supply shortfall in the economic make pass by handing it directly to consumers rather than going through the banking middlemen. The notion that Linden Lab's "deficit spending" is a significant calculate in SL's economy is a red herring. As long as they keep the total supply growing in proportion to the economy we are not going to see a dread desire the bind predicts - that would only come about if the economy were suddenly crashing anyway.
6. Seems to me desire the issues raised in the bind can be summarized in two questions: "What if a whole clump of people suddenly cashed out their Lindens?" and "What if Linden Labs decreased perhaps significantly its weekly stipend?"
7. Once again - stipend are completely insignificant.300L per week equals roughly 5 bucks per month. Every premium resident pays 9 USD per month or a little less depending on if he or she pays quarteryearly or for the whole year. But deficits can not be because of stipends alone. Also premium members are more or less pretty insignificant themselves if you be at the numbers.
8. Alan you may not know but LL has significantly reduced weekly stipends. They used to be L$500+bonuses for premiums. L$50+bonuses for basic members. Bonuses for ratings went away about 2 years ago. Basic stipends went and premiums went drink to L$400 about a year ago. Premiums drink to L$300 roughly 6 months ago. The "cashing L$ out" air is an interesting one.. how do we change out?Let's pretend I've got L$1,000,000. That's about US$4,000 furnish or act if I can change it. But. I can't "change it out" I can only change it for US$ with someone that is willing to buy them. I suppose the same is adjust on a global scale too if I have a very weak currency. Zimbabwe Dollars say. I struggle to find a buyer but at least I undergo a few billion potential purchasers. In SL. I have a few hundred thousand. Also whatever RL currency I have. I can destroy. I can theoretically act millions of US$ out of circulation in a big bonfire - I guess assemble Knox does just this. I know the tip of England does with old notes. L$. I can't do that with change surface if I set blast to the machines with the database in them. How these alter the analysis I don't experience but they do seem rather unusual when compared to other currencies.
9. The Mises piece seems to be founded on a few deeply inaccurate assumptions. The most egregious is that Linden Lab is the party buying L$ with USD. Since the whole prediction of economic change seems to be hinged on that one item. I'm not sure I can put a lot of faith in it.
10. LL has increased the money give at a large rate. That the inform of the of the conjoin. We could be heading for trouble if gdp dips. displace economic output combined with a devaluing of the linden. Small economies die when this happens.
11. Juliet wrote. "The stipends are absolutely neglectable. No way tier payments are eaten up by stipends. Since the whole bind is based on that can we ignore it as come up? Or can someone explain to me where I'm do by - please?"The bind addressed this. The air is the SL economy not LL. Tier payments are made outside of the SL economy; they go to LL which presumably uses them to pay salaries keep equipment etc. Stipends on the other transfer are money pumped into the SL economy. act a be at the economic statistics for July. LL pumped almost L$350M into SL and took out only about L$100M. That's L$250M per month being added to the SL economy's money give. believe also the fact that millions of L$ per day are sold by LL advance inflating the money supply. When populate "cash out" their L$ however they are not taking any of those L$ out of the economy--they are rather transferring them to some other avatar. The bind questions--not strongly enough. IMO--whether LL would be as willing to pay US$ for L$ should the economy continue south. So far SL has been blessed with a growth economy; what ordain come about if instead of higher and higher concurrency each month the active SL population declines while the money give continues.
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Related article:
http://www.secondlifeinsider.com/2007/08/03/economic-doom-for-sl/
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