Last year the selling rate around 253L$:1USD, now L$259:1USD. Is this inflation normal?

[MeshPromo]

 

[Chic Aeon]

As mentioned on similar threads, no.  Historically Linden Lab has maintained a fairly stable exchange rate purposefully. They let that go last year.  

[Alyona Su]

32 minutes ago, MeshPromo said:

 

Are you asking if 0.05 cents ($0.00.05) is inflation, I would think not. I wish it would go back to L$270:$1 or even better: L$300:$1. Like it was back in the SL heyday.

[Luna Bliss]

1 hour ago, Alyona Su said:

Are you asking if 0.05 cents ($0.00.05) is inflation, I would think not. I wish it would go back to L$270:$1 or even better: L$300:$1. Like it was back in the SL heyday.

What do you see as the advantages ...why do you want merchants to end up earning less for their effort, or why do you think buyers should pay less for content?

[Alyona Su]

23 minutes ago, Luna Bliss said:

What do you see as the advantages ...why do you want merchants to end up earning less for their effort, or why do you think buyers should pay less for content?

Why do you presume I want merchants to earn less? Your arguments are amazingly elementary and presumptuous. I want to buy more L$ for less RL$ - DUH. Your passive-aggressiveness knows no bounds. The consumer side of me couldn't care less what the merchants are earning, only that I get the biggest bang for my buck. DUH. And the more L$ I get for my RL$ the more I spend on said merchants. DUH.

What they say is proven true with many of your comments: "Common sense isn't very common at all."

Please do me a favor and click the "Confused" emoticon on all my posts because it would save you the time and effort of typing out your questionable presumptions and pretty much communicate your thinking.

Edited January 29, 2020 by Alyona Su

[Luna Bliss]

8 hours ago, Alyona Su said:

Why do you presume I want merchants to earn less? Your arguments are amazingly elementary and presumptuous. I want to buy more L$ for less RL$ - DUH. Your passive-aggressiveness knows no bounds. The consumer side of me couldn't care less what the merchants are earning, only that I get the biggest bang for my buck. DUH. And the more L$ I get for my RL$ the more I spend on said merchants. DUH.

What they say is proven true with many of your comments: "Common sense isn't very common at all."

Please do me a favor and click the "Confused" emoticon on all my posts because it would save you the time and effort of typing out your questionable presumptions and pretty much communicate your thinking.

There are creators who provide content, and there are purchasers of said content (and mixtures of the two). This is a community, and so both sides must be appraised to approach any kind of fairness. I would never just advocate for 'my side' (the creator) but instead try to see what the other side needs too (the purchaser). I would hope that you could move beyond your selfish concerns and view the situation as the whole that it is -- a community where all sides need to be taken into account.
But instead I have never seen you concerned with 'the other side'. You have nearly always advocated for your side (the purchaser), and have repeatedly and VERY severely denigrated the merchant (going back months/years).

If you want the purchaser to get a better deal you are wanting the creator to get less. Your pedantic phrasings can't change this fact.

BTW, I don't do "passive-aggressive" (of or denoting a type of behavior or personality characterized by indirect resistance to the demands of others and an avoidance of direct confrontation).
I am not being indirect here in the least, I am directly accusing you of being selfish and unable to see the other side in this conflict.

And so I ask you again, why should Lindex changes increasingly favor purchasers over merchants? (I am, in good faith, assuming you are able to consider factors beyond your selfish needs with this question).

Edited January 30, 2020 by Luna Bliss

[Chic Aeon]

/me notes that on many platforms the  USD to "token" ratio is fixed.  In Sansar it is 250 to 1 for example --- this since STEAM integration.   In Kitely it is 300 to 1. 

 

Creators by the way are already getting "less" in many cases.  Note the abundance of sales these last few months. Prices in general are dropping on virtual goods as well as land (I don't know about services). 

[Charlotte Bartlett]

LL back in 2006 would gain about a small amount (less than) 10% of their revenue from transactions on the LINDEX (source - John Zdanowski, CFO of Linden Lab back then).  They also actively (then at least) managed the flow to stop the L$ appreciating against the dollar when it was the good old days of growth.   They did this via Linden stipends,  selling L$ directly (so it was not always another user on the other end of that purchase transaction) and finally the "sinks." 

Now I don't know what their policy is today on their money printing activities perhaps somebody more informed can cite a source who had commented more recently.

But as we have seen increased revenue streams coming from the merchants with a reduction in revenue streams coming from Land - perhaps LL have also adjusted over the years the balancing act between printing, sinks and stipends as a result and whether that less than 10% is still the case?         

There is definitely not a free fall going on, I believe there is still management of the rate happening as there isn't sufficient volatility based on the USD movements externally over the same period.  Not sure what LL have said themselves on that front and if that contradicts any statements.

 

 

[ChinRey]

19 minutes ago, Charlotte Bartlett said:

Now I don't know what their policy is today on their money printing activities perhaps somebody more informed can cite a source who had commented more recently.

I'm not sure if I can call myself more informed but I did some calculations on it a while ago (several post, strating at https://community.secondlife.com/forums/topic/413903-process-credit-fees-raised-again/page/12/?tab=comments#comment-2038224)

From what I can see, the vast bulk of the L$ sold on LindeX come from various private entrepeneurs (mainly land barons) and exchange speculants, not Linden Lab.

LL still controls the exchange rate though, whether they are aware of it or not, since they are the only source of fresh L$.

[Charlotte Bartlett]

Just now, ChinRey said:

I'm not sure if I can call myself more informed but I did some calculations on it a while ago (several post, strating at https://community.secondlife.com/forums/topic/413903-process-credit-fees-raised-again/page/12/?tab=comments#comment-2038224)

From what I can see, the vast bulk of the L$ sold on LindeX come from various private entrepeneurs (mainly land barons) and exchange speculants, not Linden Lab.

LL still controls the exchange rate though, whether they are aware of it or not, since they are the only source of fresh L$.

Thanks I remember reading that.  To date I haven't been able to capture the underlying pattern if the money being "printed" is still actually selling to residents as it's real time and LL don't make appropriate metrics available to draw any proper conclusions.  

I would like to get an updated statement from the more recent CFO on it (esp as they are also CEO of Tilia I believe)..... paging @Ebbe Linden  (what are the odds of a response do you think).

 

[MeshPromo]

Sum of the open Sell orders at the best 20 rates = L$ 469,839,153

Sum of the open buy orders at the best 20 rates = L$ 44,979,984

USD Demand and supply ratio approximately = 10:1

If this is given for the free fall, the L$ exchange rate will rise over 300L$:1USD.

 

Someone argued as //the more L$ I get for my RL$ the more I spend on said merchants. DUH // but its not true and L$ inflation end up badly for the merchants. Here how it happen.

- Residents will not spend L$ only for the merchants. They pay for land barons, DJs/Hosters/escorts etc.

- Most of the SL residents are RL men (even we see lots of female avatars, some sources says 50% of female avis are RL men) and when shopping men pay only for what they really wants. So once a man happy with cloths and other stuff they already bought, they don't spend any more until they really want a change. Eg: If a man happy with their suit, they don't want to get something else next day. and I don't say its bad as I do the same as a man, having the same outfit for over few months.

- Once most residents (as most are RL men) get more L$ than before due to the L$ inflation, they can have the same previous marketplace consumption by using lesser USD amount. That means merchants get lesser USD amount.

 

That seems really nice in non merchants residents view. But its really bad in the point of merchants as @Luna Bliss has explained above.

 

 

 

[Chic Aeon]

Also following this line of reasoning (I think -- I am not really good at the money exchange rate stuff) our STIPEND is getting devalued.  If the exchange rate (let's forget the buy and sell differences) became 300 to 1   then our 300 lindens per month (for most of the premium folks) would be only $1 US where  it was worth $1.20 before.  Again, I am not good at this (odd since I was a math major at one point LOL - I was better when I was traveling all the time and had to deal with divergent currencies :D).

 

So the price of premium has gone up (granted after a VERY long time) but we are ALSO getting "less back" if we look at the equivalent in  USDs.   At the same time prices are dropping in general.   AND some of us -- arguably -- have inflation (or deflation of the home currency) in the real world too.   Not surprising that things are slowly spiraling in a not too promising direction for the SL citizens. 

 

This actually HELPS The Lab with their (seemingly and noted by others too) money issues of late.     If my reasoning is incorrect I am SURE someone will comment and set us straight.     In a RL conversation this is the time when I would say, "Am I getting this right?".

 

PS. I was using the difference between 250 and 300 to the USD.  It would be interesting if someone good at this wanted to compare the current actual change between say the beginning of August and now.   

Edited January 29, 2020 by Chic Aeon
adding info

[Charlotte Bartlett]

2 hours ago, MeshPromo said:

 

- Most of the SL residents are RL men (even we see lots of female avatars, some sources says 50% of female avis are RL men) ....

- Once most residents (as most are RL men) ......

 

 

 

I have to ask - I really wish people would not make up metrics to support a fact - it seems to happen in at least 98% of posts (hah a little joke there) - nobody here knows how many people are male, female, or any other gender they identify with - they may know their little circle of friends or those they work with - so cite sources if you are using them as I have above otherwise it's meaningless data dreamt up by some unknown "source"?    We also don't sell direct to our customers, it's all facilitated via their avatar so we can't also create actual consumer trend metrics to test against etc.

It's one reason why it's so hard to track the Lindex situation as there are not sufficient metrics published so even with data scraping daily - the best you can see is the larger movements (e.g. 120,000 USD moved two points below the active sells in 24 hours, or the merchant who cashed out 19.6K USD twice in 7 days as it was the largest trade of the day).  It's why I can't tell if LL are printing despite monitoring the Lindex real-time and taking data to evaluate.  I can tell they are stabilising the rate so it's exactly at the rate within 2 points they want it at.

 

 

 

[MeshPromo]

29 minutes ago, Charlotte Bartlett said:

it seems to happen in at least 98% of posts

What is the source for the figure: "at least 98%"?

 

 

[Wulfie Reanimator]

[Moderator Edit: Image with profanity removed]

Edited January 31, 2020 by Dakota Linden
[Moderator Edit: Image with profanity removed]

[Mollymews]

is normal LindeX market behaviour, since the beginning of the LindeX, to see a LindeX driven depreciation of the L$ against the US$ when Linden makes changes to their pricings of Tier, Premium and Fees. Much of it driven by resident uncertainty. Same as in the real world, uncertainty leads to the devaluing (depreciation) of capital assets. L$ being a capital asset in the context of the Second Life market. Over time, as uncertainty is removed (residents become more confident) then capital assets appreciate in a market

MoneySupply Linden acts like a real-world Reserve Bank Governor in a capital driven market.  The Governor's job in this market,is not to maintain a currency at a fixed rate of exchange. The Governor's job is to ensure there is a sufficient supply of money (L$) to match the demand for goods/services within the market at prices set by market forces, insofar as those prices can be set by residents in the market - rentals, mainland parcel sales, saleable goods and services, etc

a steady rate of exchange is a by-product of this. While desirable, is not a goal in itself of a Governor (MoneySupply Linden in this case)

if Linden were to dump the LindeX and from now on L$250 is always equal to US$1 then there is no longer a capital economy/market. Is a command economy/market

[Rya Nitely]

Oh Molly, we had a debate about this for pages and pages when you were another name. I remember us getting into all sorts of twists and turns to the point I got such a headache. And as Wulfie says 'here we go again'

It's not normal behaviour - I am a share and currency trader, and I know what normal behaviour looks like

ETA: I've been a trader since 1997, so I've spent over 20 years analysing market behaviour, everyday.

 

Edited January 30, 2020 by Rya Nitely

[Rya Nitely]

8 hours ago, MeshPromo said:

Sum of the open Sell orders at the best 20 rates = L$ 469,839,153

Sum of the open buy orders at the best 20 rates = L$ 44,979,984

USD Demand and supply ratio approximately = 10:1

If this is given for the free fall, the L$ exchange rate will rise over 300L$:1USD.

You are forgetting that the vast majority of buy orders are inworld and 'at market'.

[Dima Plessis]

On 1/29/2020 at 10:45 AM, Alyona Su said:

I want to buy more L$ for less RL$ - DUH.

I can see how that might seem appealing, however that also means those $L you buy are worth less. Those who are charging you (for rent, goods, etc.) will potentially have to raise their prices in order to offset the loss of the $L being worth less when cashed out.

For example, if I were to do my max allowed cash out of $2,000 USD a month the difference of 10L (from the usual 250 I used to cash out at to what now seems to be settling at about 260L per $1 USD) I loose $77 just from the 10L change in the sell rate that we've seen in the last 6 or so months. Add on top of that the increased cash out (from 2.5% to 5%) and MP fees (from 5% to 10%) and creators are facing a difficult choice. Keep prices the same and keep losing money, or increase prices and upset customers who thought a better exchange rate in their favor meant they could buy more stuff?

[Chic Aeon]

27 minutes ago, Dima Plessis said:

I can see how that might seem appealing, however that also means those $L you buy are worth less. Those who are charging you (for rent, goods, etc.) will potentially have to raise their prices in order to offset the loss of the $L being worth less when cashed out.

For example, if I were to do my max allowed cash out of $2,000 USD a month the difference of 10L (from the usual 250 I used to cash out at to what now seems to be settling at about 260L per $1 USD) I loose $77 just from the 10L change in the sell rate that we've seen in the last 6 or so months. Add on top of that the increased cash out (from 2.5% to 5%) and MP fees (from 5% to 10%) and creators are facing a difficult choice. Keep prices the same and keep losing money, or increase prices and upset customers who thought a better exchange rate in their favor meant they could buy more stuff?

That all SEEMS very logical.   But of course logic and human nature don't always go hand in hand. Yesterday I bought a set of lovely sweaters at a newly opened venue (four in the set) and the FOUR cost the same as I would have paid for ONE ten years ago. Prices have been dropping steadily for many things over the last few years and now with sales become more of the norm than regular pricing.

( No, not really -- I get that, but some top name creators have been having sales steadily, like one a month. So -- for anyone paying attention the sale price is as much the "normal" price as the higher price :D.  I can wait a couple of weeks.)

 

Agreed too about land pricing.  But again, there is a but.    

Here is a quick screenshot of the sims bordering my store plot. There is a lot of yellow there. More yellow than when I moved in a month or so ago.   Raising the rates would likely have folks moving out which would make things even worse for the land barons. 

When I rented my "posh" plot (with house and very nicely decorated region with lots of openspace)  I was lucky to get the last and the cheapest plot on the sim.  Now there are three big plots for lease -- not counting my smaller plot that I let go yesterday).  So landowners that rent (both big and small) are being affected.    I don't see how things can normalize until some folks leave. I don't WANT them to leave; I am just putting out that practical bit of the equation. There are tons of good creators now and not as many shoppers as in the past.   I don't see that turning around any time soon.   

Edited February 3, 2020 by Chic Aeon
spelling

[Coffee Pancake]

No one likes to let a region go as they are expensive to set up and keep going, which leads to a land glut and a fight for the bottom.

[Dima Plessis]

6 minutes ago, Chic Aeon said:

That all SEEMS very logical.   But of course logic and human nature don't always go hand in hand. Yesterday I bought a set of lovely sweaters at a newly opened venue (four in the set) and the FOUR cost the same as I would have paid for ONE ten years ago. Prices have been dropping steadily for many things over the last few years and now with sales become more of the norm than regular pricing.

Yes, but that was ten years ago. Plenty has changed since then. We're talking about a sudden change impacting sellers happening over what... 8 months?

It may well be that prices go up, I don't know, but I am guessing customers will not be happy about it. Nor does it give users much confidence if the in game economy starts making drastic shifts that appear to give them less value for their money.

[Chic Aeon]

Just now, Dima Plessis said:

Yes, but that was ten years ago. Plenty has changed since then. We're talking about a sudden change impacting sellers happening over what... 8 months?

It may well be that prices go up, I don't know, but I am guessing customers will not be happy about it. Nor does it give users much confidence if the in game economy starts making drastic shifts that appear to give them less value for their money.

ONLY the sweater example was ten years ago -- looking at a historical trend. The constant sales began in November.  And the private land exodus that I noted was also since November.   At least the references that "I" made. 

I am not arguing that prices should stay the same or keep falling. But I don't think too many creators (maybe mesh heads and some bodies would qualify) will be able to raise prices and actually GET more lindens in total. They will be risking the folks who "just won't pay that".   So it is a gamble for sure.   

 

For example -- I was at a popular venue a bit over a month ago. There was a set of dining furniture and decor.  It was priced REALLY HIGH (in my mind anyway).  I could get comparable quality for less than half the price EASILY --- even better deals if I shopped the constant sales.  So WHY would I buy the expensive one?  There are a few super creative brands that turn out unusual and niche products.  THEY might be able to get away with upping prices a bunch. Happily (for me) I have noted that even though their products continue to be lovely, most  brands (not all) have joined in the cheaper prices trend.  It's called competition and it is definitely in play these days. 

By summer the "trend" will likely be VERY CLEAR and we can look back and see how well we guessed.  

 

I just moved from my "foo foo" and very lovely 1024ish abode with lots of prims I didn't use plot that cost me $1250 a week to a lovely ultra modern two story home that is at least four times the size --- for $100 a week. They are both above the water with clear ocean views. They both are in communities with nice houses. I am using the same number of land impact in both -- 300.   I couldn't justify the price of the other place when my current was just as nice for less than a tenth the price.   

 

[Alyona Su]

1 hour ago, Dima Plessis said:

I can see how that might seem appealing, however that also means those $L you buy are worth less.

Your logic is flawed. I stopped reading after this line because of it.

You are basing the value of the L$ on the U.S. $ and that is not what I am buying; when I am spending U.S. $ to buy Linden $ then the more Linden $ I get per $1 U.S., then that is a higher value of that $1 U.S.

Important distinction: When trading L$, the value is placed in the L$ - the source of the trade for you wen buying U.S. $. The opposite is true when trading U.S. $ for Linden $; the value for the source is the U.S $.

This is simple-simony arithmetic: The more you get for your trading currency, the higher value that trading currency is.Or do you shop for a new [name anything] and choose the value your purchase based on how much profit the seller is making, or how much you save when acquiring it? So, you'd rather pay $1 for 5 M&Ms because the M&Ms are where the value is, rather than getting 10 M&Ms for the same $1? I don't ever what to go shopping with you. Anyone with half a care (Governments notwithstanding) will always budget themselves and attempt to get the best value they can for their purchase.

This is why there are two trading levels on the exchange: a "trading zone" - People buying L$ want as much as they can get for each U.S. $ and vice-versa for those wanting sell L$ for  U.S. $. You say you want to sell only L$10 for each $ U.S.? Fine, but I'll buy from the person selling L$11 per $ U.S. - fortunately the system automatically adjusts for this.

When I buy L$, I am buying from those who want $ U.S. really fast and willing to spend more L$ to get it (I am selling U.S.$). When you want as much $ U.S. as you can get, you are selling to people who want L$ right now (I am selling L$). In both cases, the value is in what I am selling. The more I can get for each count of what I am selling, the higher the value of what I am selling is.

It is fortunate that there are both types and that the system safeties ensure we each get the maximum for our trade.

This is how it works in SL; this is how it works in RL.

Do yourself a favor, stay away from the LindeX, you might get burned.

Edited February 3, 2020 by Alyona Su

[MeshPromo]

44 minutes ago, Chic Aeon said:

Yesterday I bought a set of lovely sweaters at a newly opened venue (four in the set) and the FOUR cost the same as I would have paid for ONE ten years ago. Prices have been dropping steadily for many things over the last few years and now with sales become more of the norm than regular pricing.

According to my observation the first reason for dropping the clothing price is, due to the full perm cloths re texturing. It is cheap for the full perm buyers to buy something for 250L$ and use for themselves and then sell the re texturing for 50L$ each. At least 7 sales per 50L$ will cover the cost with texture upload.

Second reason is the huge competition. Demand is reducing due to the decrease of the SL residents, but the supply getting increase as more and more merchants join every day, causing the "theory of price".

Third reason is "obsolescence". Years or more older items are no longer impressing the customers, therefore if need some sales the price should be reduced while creating items with latest tech.

Edited February 3, 2020 by MeshPromo