The $ value of the L

Perrie Juran · August 1, 2014

Qie Niangao wrote:

DejaHo wrote:

This is exactly what I'm trying to get at - why did you expect a dip? I suppose it's for the same reasons I wrote this thread. A dip or a raise must occur, economics 101. When, and how much?

This may be why members of the

Council of Economic Advisors

generally take another course after Econ 101.

The L$ supply is even more tightly managed than M1, with more awesomely powerful levers than mere Quantitative Easing.

We know that LL sells L$s on the LindeX to prevent the value from climbing much beyond a target of about L$250/US$. Years ago, we even knew how many L$s they sold, but not anymore.

There are also substantial "sinks" in the L$ supply -- processes that destroy L$s, such as upload fees, that generate demand to replenish the L$ supply even when the SL economy is shrinking. Years ago, we even knew how large these sinks were, but not anymore.

From that past data, and from prudent business practices, we can be pretty sure that LL never

buys

L$s.

Hence, although we may no longer know exactly how large L$ sources and sinks are these days, we can safely assume that the sinks are

huge

, and that under normal circumstances, LL is selling

a lot

of L$s into the LindeX. We can assume all that on the evidence of years and years of a flat exchange rate, very rarely even noticeably perturbed by any amount of bad news that might otherwise erode the L$'s value.

Simply put, there must be a very fat cushion of L$ sinks that prevent the value from falling, otherwise it would have fluctuated more in the past. The rock-steadiness of the L$ through the whole cycle of this latest news is further evidence of just how big that cushion must be.

It's been holding at that $250L/US$ rate since around the Summer of 2011. You have to go further back to find a higher rate.

http://gridsurvey.com/lindex.php?page=22

http://gridsurvey.com/charts/lindexstock.png

Also it is not the only way LL has to pump money into the Economy. I have seen evidence to suggest that in the past certain Clubs that offered extremely high contest payouts were in fact Linden Fronts. But that might fall under the Conspiracy Theory umbrella.

DejaHo · August 1, 2014

Madelaine McMasters wrote:

DejaHo wrote:

Madelaine McMasters wrote:

DejaHo wrote:

Today, the cost of an L, please excuse the following pun, has traded virtually unchanged since before the announcement by Mr. Ebbe Altberg of a 2015 v2 release of Second Life.. That's only 6-8 months from today.

You've misunderstood or misquoted Ebbe. I don't expect to see SL2 before 2016, if at all.

In your most humble opinion Is that early or late 2016? What do you mean by if at all, are you saying the CEO has lied to us?

Something as complex as SL2 cannot be taken from concept to delivery in 6-8 months. From my experience with such things, two years seems more likely. So I'd expect to see SL2 ready for occupancy no earlier than mid 2016. I don't think that disagrees terribly with anything Ebbe's been saying. And, to ensure that my opinion is humble,

I'll admit that I'm terrible at estimating how long it'll take me to complete a project.

That's one reason I retired. I was just getting tired of burning myself out to keep my unrealistic promises. There appear to be some things I cannot learn.

As for "if at all", Ebbe cannot control the unknowns and external forces at work on Linden Lab. I expect Ebbe and his team will work like hell to make their dream come true. But, that is no guarantee of success. If they try their best and fail, as I often do, it is not a lie. It is life.

Why are you preaching to me? I don't need technology lessons either. I asked a question relating to the sl economy and you're off on some personal riff about deliverables. The ceo told us 2015. Do you know when LL started development, no, you only know when it was announced, am I correct? Just because you are terrible at estimating doesn't mean Mr. Altberg is as terrible as you.

DejaHo · August 1, 2014

Qie Niangao wrote:

DejaHo wrote:

This is exactly what I'm trying to get at - why did you expect a dip? I suppose it's for the same reasons I wrote this thread. A dip or a raise must occur, economics 101. When, and how much?

This may be why members of the

Council of Economic Advisors

generally take another course after Econ 101.

The L$ supply is even more tightly managed than M1, with more awesomely powerful levers than mere Quantitative Easing.

We know that LL sells L$s on the LindeX to prevent the value from climbing much beyond a target of about L$250/US$. Years ago, we even knew how many L$s they sold, but not anymore.

There are also substantial "sinks" in the L$ supply

-- processes that destroy L$s, such as upload fees, that generate demand to replenish the L$ supply even when the SL economy is shrinking. Years ago, we even knew how large these sinks were, but not anymore.

From that past data, and from prudent business practices, we can be pretty sure that LL never

buys

L$s.

Hence, although we may no longer know exactly h

ow large L$ sources and sinks are these days, we can safely assume that the sinks are

huge

,

and that under normal circumstances, LL is selling

a lot

of L$s into the LindeX. We can assume all that on the evidence of years and years of a flat exchange rate, very rarely even noticeably perturbed by any amount of bad news that might otherwise erode the L$'s value.

Simply put, there must be a very fat cushion of L$ sinks that prevent the value from falling, otherwise it would have fluctuated more in the past. The rock-steadiness of the L$ through the whole cycle of this latest news is further evidence of just how big that cushion must be.

Thanks for the response. Sometimes sinks get clogged and sometimes the more huge the sink the more huge the clog. What happens when all the sinks get clogged at the same time?

Perrie Juran · August 1, 2014

DejaHo wrote:

Thanks for the response. Sometimes sinks get clogged and sometimes the more huge the sink the more huge the clog. What happens when all the sinks get clogged at the same time?

Me, I usually call a Plumber.

Dresden Ceriano · August 1, 2014

If bricklayers can lay bricks, then why can't plumbers lay plumbs?

...Dres

Qie Niangao · August 1, 2014

DejaHo wrote:

What happens when all the sinks get clogged at the same time?

Oh, it could happen. Well, less metaphorically, a time may come when nobody wants L$s at any price. Indeed, across the street, a very prominent Estate owner speculated that the ultimate end of the Linden Lab virtual worlds will happen at the same time that the L$ collapses in value. That sounds correct to me.

Thing is, I think there's pretty much zero chance that anything like that will happen when SL2 is introduced. SL1 remains through that whole transition, so it promises to be a non-event compared to other historic changes in the SL economy. Oh, SL2 might eventually lead to that final decline and collapse of the whole enterprise, but not doing SL2 would surely lead to just such a collapse, and probably sooner.

Anyway, it's all pretty pointless to speculate. As far as I know there's no way to sell the L$ short, and only an idiot would hoard L$s expecting a big spike in value.

Parhelion Palou · August 1, 2014