Linden exchange rate - inflation on the horizon?

[Jenwen Walpole]

What is the cause of the recent spiral of the exchange rate for lindens. It had been flat for eons, and now its creeping upwards.

not to mention the transaction fees and exchange fees

will this all cause sl  inflation because people depend in exchange rates to pay tier fees?

 

[Alyona Su]

It's literally pennies. Even if it hit L$300:$1 it's still pennies. The only possible way for there the be a wide enough gap to make a difference is if you buy or cash-out in large bulk of U.S. Dollars - for example: the difference between 250:1 and 253:1 when spending $100 U.S. to buy or sell L$ is $0.20 cents. So unless you're spending upward of $1,000.00 or more it's a bunch of paper tiger chicken little paranoia. And if you're throwing around $1,000.000 then you can afford it; cost of doing business, yadda, yadda, yadda, so deal with it and move on. Or just move on.

I'd LOVE to see a 300:1 ratio. I've never seen it in all my time in SL and I've been here for a few days. The running average for a couple years when I first got here was 270:1 - I wish it were that now.

Edited October 23, 2019 by Alyona Su

[Maitimo]

Its creeping back towards where it always used to be; around L$263-265 to the dollar, give ir take a few, before LL kept it artificially capped at 250. My guess is it will settle at around there, or just below.

Like Alyona, I wish it would rise more; I only buy L$ and the pathetic pound to dollar exchange rate has a huge effect. Two years ago, I could get L$390 for £1, now I get not much more than 300.

[Chic Aeon]

At least in the US, inflation is definitely on the rise (even though it might not be showing up in the published statistics -- I don't watch).  Most everything I buy has gone up by about 20 percent in the last year -- this including utilities as well as purchases, some things that 20 percent in the last couple of months.  We don't need to get political here, but money isn't going as far in RL either.     So this is pretty much expected.    

[Kiera Clutterbuck]

Packages of food are getting so much smaller. Some of them are more like single-serving size now.

[Garnet Psaltery]

I only sell these days, and it would be dismaying if the returns dipped significantly.  It would mean having to raise rents, and I really don't want to do that.

Edited October 23, 2019 by Garnet Psaltery

[Lindal Kidd]

1 hour ago, Chic Aeon said:

At least in the US, inflation is definitely on the rise (even though it might not be showing up in the published statistics -- I don't watch).  Most everything I buy has gone up by about 20 percent in the last year -- this including utilities as well as purchases, some things that 20 percent in the last couple of months.  We don't need to get political here, but money isn't going as far in RL either.     So this is pretty much expected.    

!!!!! Chic, do you have data, or is this just your impression?  I'd think that if the cost of living had really gone up by 20%, it would not only show in the official statistics, the media would be howling about it.  Pizza (the staff of life!) has not increased (for me) and the price of gas is actually down.  Interest rates are down.  Some things at the grocery store are up, but mostly things I don't buy.  Clothing prices continue low.  Prescription drugs are up, but my insurance handles most of that.  Shipping costs are way up, across the board, which is why I buy as much as I can from Amazon Prime.  Personal services, labor costs of all sorts, are up.

[Luna Bliss]

3 hours ago, Garnet Psaltery said:

I only sell these days, and it would be dismaying if the returns dipped significantly.  It would mean having to raise rents, and I really don't want to do that.

and raise prices for content too...except nobody will pay more for content...

[Chic Aeon]

3 hours ago, Lindal Kidd said:

!!!!! Chic, do you have data, or is this just your impression?  I'd think that if the cost of living had really gone up by 20%, it would not only show in the official statistics, the media would be howling about it.  Pizza (the staff of life!) has not increased (for me) and the price of gas is actually down.  Interest rates are down.  Some things at the grocery store are up, but mostly things I don't buy.  Clothing prices continue low.  Prescription drugs are up, but my insurance handles most of that.  Shipping costs are way up, across the board, which is why I buy as much as I can from Amazon Prime.  Personal services, labor costs of all sorts, are up.

No, it is MY cost of living where I live.  But I don't hear a lot of folks saying things are getting cheaper no matter where they live. 

 

I am taking rent (about 30 percent in the last year but I live (very surprisingly) in one of the most expensive places in my state (really not that fancy just expensive). A small house use to be about $900 a month to rent and now run about $1350 (I know two sets of folks that had to move because they couldn't afford the raise).  My food bill is up over 20 percent, wine is now 8 a bottle average instead of 6 that I paid last year (I lowered my expectations and am still at 6).  The water bill was raised 33 percent ish with the same raise slated for next year.  

My dentist went from $150 a cleaning to $235.  I could list and list.

 

But this is ME and anecdotal evidence.    My clothing isn't any cheaper and I buy online. Not much more expensive though. Some household things that I buy at Amazon are higher - some lower.   Shipping cost are low but the price of PRIME membership increased a LOT a year or so ago so maybe that "low" doesn't count so much. Actual shipping if you take a package down to UPS or FEDEX is heart-stoppingly expensive.    

I haven't eaten pizza in about a decade. I am an organic gal for the most part or try to be.   

 

 

Not an argument, just saying that MANY items have increased for the people around me. 

 

A quick search for official info on line tells me that the government says there is NO INCREASE.   That certainly isn't MY world :D.   Happy if it is yours. 

[Lindal Kidd]

Sorry about those rents, for sure!

[FairreLilette]

12 minutes ago, Lindal Kidd said:

Sorry about those rents, for sure!

Those rents are cheap that Chic listed.

It's about 1,600 a month for a studio or 1 bedroom apartment in California.  Buy a house, you are looking at a 4,000 dollar or more a month mortgage.

Interest rates 'to refinance' are low but that's for people with some collateral in their home, I'd suspect and/or excellent superior credit.  

But, I agree with the raise prices for land...I cannot raise my prices at this time.  

I'd like to have more Linden for my money because the Paypal fees are too high, imo.  

I liked it when Paypal was about .50 cents a transaction.  That's still good money. 

I think the problem is somewhere related to the transaction fees.

Some people seem to be cashing out...perhaps they do not like Tilla.   

Edited October 24, 2019 by FairreLilette

[FairreLilette]

8 hours ago, Garnet Psaltery said:

I only sell these days, and it would be dismaying if the returns dipped significantly.  It would mean having to raise rents, and I really don't want to do that.

Also, I think it's a flood of the market from people wanting to exit at any price because of Tilia.   They are just really wanting out.  Heck, I'll take 300 or 400 lindens per dollar if they (not you) want to sell to me.  However, that will never happen unless they were actually in my apartment to transfer the lindens and I pay cash because I'd never send a check or money order 'hoping' to receive lindens.  

But, I don't think raising rent is a way to gain or keep customers because of Tilia.  Wouldn't it be better to average in the price of the lindens you sell?  If you know what that is.  It's part of business. 

If it's really a lot of money, I would consult a financial adviser on how to "average in" to cut your losses.

Edited October 24, 2019 by FairreLilette

[Chic Aeon]

I really don't know what the problem is -- likely many things. But I have said before lately that I think I really underestimated the Tilia effect.   While some folks stated they were closing shops, not that many (here on the forums) said they were leaving.  I didn't have anyone on my friend's list leave but it is a tiny list and mostly creators.  Still we seem to be missing a lot of former forum folks.    I really didn't see that happening :D.   

 

My crystal ball (just a hunch) tells me that the next big surprise (hopefully mostly good) will be happening around the end of the year or beginning of next. That's not too far in the future to wait and see how the tide flows. There have been other bombshells in SL's past (banks and gambling stand out as two) and we have weathered them, so hopefully we will weather these times too.  Even if folks weren't upset with the Tilia TOS etc, quite a few here mentioned issues with conflicts of RL law in their country and what the lab demanded to cash out in the future.   So some folks had no choice but to stop sending money out --- and for many that also meant stopping creation and even leaving.  Sad. 

[Kyrah Abattoir]

Ends of month tend to make people a bit more desperate to cash out fast so I typically try to sell earlier than that.

[Alyona Su]

6 hours ago, Kyrah Abattoir said:

Ends of month tend to make people a bit more desperate to cash out fast so I typically try to sell earlier than that.

This. Also, holidays are coming up. Since we are a material world, it helps to have extra cash to buy all that stuff most people never need but for greed.

[FairreLilette]

8 hours ago, Chic Aeon said:

 Even if folks weren't upset with the Tilia TOS etc, quite a few here mentioned issues with conflicts of RL law in their country and what the lab demanded to cash out in the future.   So some folks had no choice but to stop sending money out --- and for many that also meant stopping creation and even leaving.  Sad. 

Yeah, I assumed it may be conflicts within their laws itself in regards to Tilia.

It will wash itself out eventually and it is sad but I think this American law that Tilia has went into effect almost a decade ago or maybe I just heard about it a decade ago....but it's been a long time coming.

I do think Paypal fees are little high.  Charging $1.50 for 2500 lindens is a lot considering Paypal runs mostly on an automated system.  The Paypal charge is even $1.50 if you want 500 lindens which shows it's mostly an automated system via Paypal.  I think Paypal should lower there fees.  

I am small potatoes in my SL business, I put the Lindens back into my hobby and I do this to avoid Paypal fees, but it works for me - a small potatoe.  

Edit:  Those Paypal fees are a ballpark figure but it is around $1.50, maybe a little more...like $1.53 or something like that.  

Edited October 24, 2019 by FairreLilette

[Garnet Psaltery]

15 hours ago, FairreLilette said:

But, I don't think raising rent is a way to gain or keep customers because of Tilia.  Wouldn't it be better to average in the price of the lindens you sell?  If you know what that is.  It's part of business. 

If it's really a lot of money, I would consult a financial adviser on how to "average in" to cut your losses.

No it would not be better, and don't be rude.   I say what I mean, but perhaps I could be clearer; a permanent or long-term dip in returns would absolutely mean raising rents.  I'm not arguing on this point because you think you know my situation and you don't.

Edited October 24, 2019 by Garnet Psaltery

[FairreLilette]

1 hour ago, Garnet Psaltery said:

No it would not be better, and don't be rude.   I say what I mean, but perhaps I could be clearer; a permanent or long-term dip in returns would absolutely mean raising rents.  I'm not arguing on this point because you think you know my situation and you don't.

Well, it's something that happens in rl too in the stock market or currency markets (The Forex) with dips, crashes.  

You just have to do what you have to do.  And, I did not mean to be rude.  Averaging in is done in the every day financial world with stocks, commodities, currencies.   

Averaging in works and helps sometimes because every situation is unique.  

Edited October 24, 2019 by FairreLilette