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


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9 hours ago, Alyona Su said:
11 hours 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.

I stopped struggling to understand what you were trying to say after this line

Because I think you misunderstood what Dima was saying. She was talking about inflation resulting from a devalued L$, i.e., basing the value of the L$ on what you can buy with it. If we have inflation in rent and goods and services you would end up getting less value for your L$.

ETA: This is worth thinking about, who is most likely to gain from inflation - merchants, customers, landlords, renters or LL?

Edited by Rya Nitely
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  • 2 weeks later...
On 2/3/2020 at 3:34 PM, Chic Aeon said:

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.   

 

How can your new landlord make her/his tier at $100 a week? How long can  that last , unless a hobby

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4 hours ago, Cam Mode said:

How can your new landlord make her/his tier at $100 a week? How long can  that last , unless a hobby

Agreed. Apparently profit isn't the motive.  It isn't always :D.  In fact there are TONS of stores  in SL that never make a profit. The people just enjoy the process of being a store owner.    

Prices on land and rentals have dropped dramatically over the last six months. The place where I have my shop has many yellow plots now. Not everyone is scaling back and looking for good deals, but enough that it is noticable.   Things may turn again and prices may rise. We have certainly seen that before in SL --- just like in real life.     

 

I bought my RL  home close to the top of the market. It lost value (on paper anyway) for maybe eight years. I didn't care as I had no intention of selling.  Then things changed and now it is worth much more than when I purchased. Again, I don't care since profit wasn't MY motive.

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On 2/3/2020 at 6:42 PM, Alyona Su said:

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.

I can't believe you're saying this. It's completely solopsistic, as if the external world doesn't exist. An illusory dollar that buys you more Lindens becomes a "more valuable" dollar subjectively only to you -- whoever heard of such a thing!

The dollar isn't worth *more* because I can buy MORE of a currency; it's worth more when I can buy LESS of a currency.

A simple example is the Russian ruble, as can be seen on charts like this. It's often analyzed as tied to the price of oil as you can see here. Ask a Russian who has to take 66  units of his currency to get one dollar, when 20 years ago he could take 20 units of his currency -- he has less of his paycheck. When he has to spend more rubles to buy a dollar, he has less rubles and his currency is worth less. 

You're confusing the value of the currencies themselves with your subjective need to have the experience of getting more Lindens per dollar. That may be a more valuable state of affairs for you, but it's not making the currency intrinsically more valuable, that's absurd. In fact, now merchants who work hard and make things and try to cash out their Lindens get less dollars for their trouble; their paycheck is less.

Generally people analyzing this have pointed to the flood of Premium Account stipends of $300 per account. This is like printing money. The Lindens control the Linden value and could adjust this and do adjust this. But at times when they want people buying more content, like all the add-ons and things for the Linden homes, they want users to feel flush with cash so they haven't bothered to straighten this out. 

Merchants will continue to complain, especially about higher fees, and eventually the Lindens will have to adjust this.

But again, no way in RL does it work that you value the dollar more that requires more units to buy, say, a euro. 

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20 minutes ago, Prokofy Neva said:

The dollar isn't worth *more* because I can buy MORE of a currency; it's worth more when I can buy LESS of a currency.

A simple example is the Russian ruble, as can be seen on charts like this. It's often analyzed as tied to the price of oil as you can see here. Ask a Russian who has to take 66  units of his currency to get one dollar, when 20 years ago he could take 20 units of his currency -- he has less of his paycheck. When he has to spend more rubles to buy a dollar, he has less rubles and his currency is worth less.

yes agree.  Value is the return to the producer not the consumer. In the SL case the producer residents have had their work devalued

consumers see it like: I get more value for my money.  Which is true. They do, at the expense of the producer

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I was sad to have to pay tier recently at 260, it was so stacked up I couldn't hope to set a sell and have it pay for days. I *had* a sell posted at 259 that waited a week and hadn't sold.

I suppose creators can sell more, or lower their prices? I dunno.

I guess that's why the 30L Saturday stuff has proliferated. There are now so many sale events, especially on weekends, that they  have replaced regular shopping. I now stop myself from buying something at a merchant's for $199 because I know if I wait long enough she'll have it on 35L Sunday or Wanderlust or whatever. And that's not good. But they and we have been driven to it.

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  • 1 month later...

i miss when it was 100L/$1USD, making things was actually worth it, now you get people complaining that you're selling an item you spent weeks on for a single dollar because thats just to much money! you really dont get a lot back for the amount of work you put in and people still have the audacity to complain about it.

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