Curse

The Drunkard · Nov 29, 2010, 04:39 PM // 16:39

Quote:

Originally Posted by Mia Clemons

If you've studied American History at all, you would know that unemployment and starvation were NOT the immediate results of the Stock Market crash. The important consequences of the market crash were: 1) A serious lack of faith in the economy, which lead to market instability, and 2) The value of the dollar collapsed to the point that the government HAD to step in.

My analogy was, by increasing the overall supply of gold to the degree that is mentioned in here, you would effectively be creating a similar situation to that of the market crash.

/notsigned again

I'm failing to understand how the economy is going to crash in this scenario. The price of ectos will collapse to 5k when this is initialized and then will slowly rise and even out at a much lower price than before. The only people who will be panicing are the people who are sitting on stacks of ecto, who I feel no sympathy for since they are just hoarding them anyway.

You're completly right about the overall supply of gold being increased, but there will only be a select few in which actually see the large influx of gold.

This change will hurt cash mediums (IE ecto, zkeys, picks) and inflate the price of items worth more than 500k, but I fail to see how such items are needed to max HoM anyway.

/signed

MrKGado · Nov 29, 2010, 05:42 PM // 17:42

Quote:

Originally Posted by gremlin

Would I be right in saying many of the people who don't want this have a substantial investment in ectos and are busy farming for more.
Not saying that is wrong just an observation.

As I posted in another thread now closed it is very inconvenient to have to buy ectos to make a trade with another player.

Any player should be able to pay any amount they wish without any artificial limit if they have the cash they should be able to spend it.
If altering the currency badly affects the price of ectos so be it, start dumping them now so you won't get caught out if they drop in value.

Or perhaps a better suggestion which would preserve the value of ectos.

If your going to use ectos or anything else as currency then its value should be fixed in the game and it should be removed from the rare material traders list.

So we would have Gold Platinum Ecto.
Problem solved we can trade in ectos and they would act as real currency.

Since it already exists in the game it shouldn't take much time to remove it from all the traders and fix its value.

Personally, I am not a fan of raising the cap with the exception of storage, but this is probably the best idea I have seen yet on the matter. I don't think changes should be made at this point, but I would rather see this change than increasing the amount of gold in trade and on a player.

Kronk_Shaan · Nov 29, 2010, 07:10 PM // 19:10

This game and real life have one thing in common for sure, when you die you can't take it with you. And, when you are playing GW2, you GW1 characters will be technically dead (either because you don't play them, or the simple fact that 200 years or more has passed). So, why hoard?

Long story, short...there is no real reason to cap the amount of gold per trade or stored on ones account. Hoarding gold doesn't make it worth more or less, and who cares if it lowers the value of other items with their regard to gold. The world didn't end when ecto dropped from 17-20k down to 5k, and it won't end if they raise the cap on gold and ecto becomes worth it's value with relation to the number of people who still want it to make armor. Because, you can't take it with you.

/signed

*lemming* · Nov 29, 2010, 07:26 PM // 19:26

Quote:

Originally Posted by The Drunkard

This change will hurt cash mediums (IE ecto, zkeys, picks)

Bad idea when most of the wealth in the game is stored in that form.

Winterclaw · Nov 29, 2010, 08:14 PM // 20:14

Quote:

Originally Posted by lemming

It's pleasant to see that people think that games should be balanced around players' spite.

Barter items should be something that always exist at a fixed price and have no other use than being able to turn in for the listed amount. Crafter materials shouldn't be pushed into exorbitant prices for artificial means.

Xenomortis · Nov 29, 2010, 08:21 PM // 20:21

Quote:

Originally Posted by Winterclaw

Barter items should be something that always exist at a fixed price and have no other use than being able to turn in for the listed amount. Crafter materials shouldn't be pushed into exorbitant prices for artificial means.

Then the in-game currency needs to be given more value. Raising the cap won't do that.
Breaking ectos as a currency would be immensely difficult to do sensibly. The only trouble with having something like ectos inflate to act as currency is that it greatly inflates the value of whatever that item is required for. An upshot is that it's much more abundant.

Mia Clemons · Nov 29, 2010, 09:08 PM // 21:08

Quote:

Originally Posted by Kronk_Shaan

This game and real life have one thing in common for sure, when you die you can't take it with you. And, when you are playing GW2, you GW1 characters will be technically dead (either because you don't play them, or the simple fact that 200 years or more has passed). So, why hoard?

Long story, short...there is no real reason to cap the amount of gold per trade or stored on ones account. Hoarding gold doesn't make it worth more or less, and who cares if it lowers the value of other items with their regard to gold. The world didn't end when ecto dropped from 17-20k down to 5k, and it won't end if they raise the cap on gold and ecto becomes worth it's value with relation to the number of people who still want it to make armor. Because, you can't take it with you.

/signed

fyi, you cannot assume EVERY player will decide to play GW2 and abandon GW1. Anet cannot let the economy collapse just because most of the players will be playing GW2.
It's true that the economy wont completely collapse but the GW economy is just like any real world economy: increasing the supply of one common-public good (gold) offsets the value of any product that depends on it. In my example of the US Stock Market crash, the value of the dollar significantly decreased and thus inflation ensued. If the gold supply of GW were to suddenly increase like in this proposition, the value of all gold-related items in the game (which is everything) would experience a dramatic increase or decrease depending on elasticity.

Kawil · Nov 30, 2010, 12:29 AM // 00:29

Quote:

Originally Posted by Mia Clemons

If the gold supply of GW were to suddenly increase like in this proposition, the value of all gold-related items in the game (which is everything) would experience a dramatic increase or decrease depending on elasticity.

QFT. And, it would happen even more dramatically in GW because there is a never-ending supply of gold. It's not finite so it wouldn't hold any value.

Yawgmoth · Nov 30, 2010, 01:44 AM // 01:44

A common misunderstanding is that raising the storage gold cap would somehow increase the gold supply.
WRONG.
Even an infinite gold storage cap wouldn't affect how much new gold would be entering the economy and how much would be leaving it.

It's the changing of the trade cap that may have a significant effect on the alternative currencies (mainly ectos) to gold exchange rates.
Just think about possible cases:
Infinite storage of gold in chest but keeping the 100k per character and trade limit would mean no real change in the way players trade and no short or mid term effect on ecto prices at all. Only the players who already have a lot of ectos would be possibly less inclined to buy even more if they were just amassing value without aiming for something expensive to buy.

Now imagine an update as suggested in the OP comes real. 5M in storage, 500k per character. Do you really think people would suddenly NEED to posess large value in pure gold? In a game with no huge gold sinks? Ecto value crash? Players holding many stacks would suddenly dump them? Can you imagine lots of sellers going "WTS blahblah 400k NO ECTOS"? A complete change in the way of trading?
No. It would just mean more ways of trading. No crash would happen immediately and ectos would remain a currency, depreciaction wouldn't be dramatic at all. Even if some players panicked ectos wouldn't drop below 6k. The pure gold trading wouldn't become the normal standard way to do 100-500k trades exactly because there IS NOT ENOUGH GOLD in the economy!
If you think that dumping loads of ectos to trader will generate the gold, you're wrong. It's quite the opposite, practically trader will only pay the gold that players spent at him and there will be players buying them (there have always been such players, even if it seems unreasonable), effectively removing gold from the economy (trader profit is big). Ofcourse in a short term we would see a price crash but it would balance out at levels not much lower than current.

Only something like the solution suggested long ago - instead of rising caps introduce valuable inventory items - stackable 100k banknotes (sell and buy to any merch at fixed price of 100k) - effectively removing the trade/storage caps almost entirely (1 stack = 25M, tradelimit 175,100,000g) would crash ecto and armbrace prices, as it would be a clear signal that they're no longer currencies. But that crash can be prevented by introducing an NPC to buy ectos/braces at a fixed gold price for a limited time - providing price floors and removing the excess ectos/braces that were stored just for value. That *would* be generating tons of new gold into the economy, but no new value and as such *no inflation* would be observed.

I Echo Dshot · Nov 30, 2010, 01:54 AM // 01:54

It would decrease the liquidity of important commodities.

Mia Clemons · Nov 30, 2010, 03:52 AM // 03:52

Quote:

Originally Posted by Yawgmoth

A common misunderstanding is that raising the storage gold cap would somehow increase the gold supply.
WRONG.
Even an infinite gold storage cap wouldn't affect how much new gold would be entering the economy and how much would be leaving it.

It's the changing of the trade cap that may have a significant effect on the alternative currencies (mainly ectos) to gold exchange rates.
Just think about possible cases:
Infinite storage of gold in chest but keeping the 100k per character and trade limit would mean no real change in the way players trade and no short or mid term effect on ecto prices at all. Only the players who already have a lot of ectos would be possibly less inclined to buy even more if they were just amassing value without aiming for something expensive to buy.

Now imagine an update as suggested in the OP comes real. 5M in storage, 500k per character. Do you really think people would suddenly NEED to posess large value in pure gold? In a game with no huge gold sinks? Ecto value crash? Players holding many stacks would suddenly dump them? Can you imagine lots of sellers going "WTS blahblah 400k NO ECTOS"? A complete change in the way of trading?
No. It would just mean more ways of trading. No crash would happen immediately and ectos would remain a currency, depreciaction wouldn't be dramatic at all. Even if some players panicked ectos wouldn't drop below 6k. The pure gold trading wouldn't become the normal standard way to do 100-500k trades exactly because there IS NOT ENOUGH GOLD in the economy!
If you think that dumping loads of ectos to trader will generate the gold, you're wrong. It's quite the opposite, practically trader will only pay the gold that players spent at him and there will be players buying them (there have always been such players, even if it seems unreasonable), effectively removing gold from the economy (trader profit is big). Ofcourse in a short term we would see a price crash but it would balance out at levels not much lower than current.

Only something like the solution suggested long ago - instead of rising caps introduce valuable inventory items - stackable 100k banknotes (sell and buy to any merch at fixed price of 100k) - effectively removing the trade/storage caps almost entirely (1 stack = 25M, tradelimit 175,100,000g) would crash ecto and armbrace prices, as it would be a clear signal that they're no longer currencies. But that crash can be prevented by introducing an NPC to buy ectos/braces at a fixed gold price for a limited time - providing price floors and removing the excess ectos/braces that were stored just for value. That *would* be generating tons of new gold into the economy, but no new value and as such *no inflation* would be observed.

While i could have a lot to say to you about basic economics, i'll repress to just comment on a few factors of your statements:

1) Yes, i do believe ecto-hoarders would sell their stacks asap in order to acquire gold. As i have said twice already, gold will always be desired over any other good in the economy due to its nature. Imagine if for some reason the current U.S. market lost its faith in the $20 bill. As the demand for $20 has decreased, the demand for more of the lesser forms of trade ($10 bills, $5 bills) will increase dramatically. The point im making is that the lesser or 'truer' forms of trade like gold in GW will always retain their value (unless a truly horrific crash happens). Which leads me to my second point....

2) You commented that there would not be enough gold in the economy for purchases 100k-500k, i disagree. If this change was implemented, players would lose faith in the ecto or other mid-range forms of trade. It's price would be reduced significantly to the point that players who have over 1,000K would be forced to sell their ecto to minimize losses from the shift in ecto price. Again referring to my example above, if the $20 bill was losing value, it is natural for you to want to get rid of them in order to acquire more valuable or stable forms of trade. I could site several examples from World Economic History; however this forum is not the place for such a thing.

3) I do agree with you on the fact that increasing the storage vault cap would not dramatically affect the GW economy. The only change is that players would invest a certain amount of gold in ectos to serve as an intermediate item for purchases exceeding 100k, while keeping the majority of their funds in gold (as it is the most reliable and stable currency).

On a side note, i also agree with you that the market would eventually stabilize in the long run, as every economy does.

I strongly suggest everyone who reads a forum on any form of economics at least take an economics class so they know how things work and so they dont embarrass themselves.

NerfHerder · Nov 30, 2010, 06:36 AM // 06:36

Quote:

Originally Posted by Mia Clemons

...

Yes, basic economics do apply to even the GW economy. But I dont think it works the same as your examples. First off, if the trade/storage cap were increased, a bunch of gold doesnt appear out of thin air. That gold would have to be farmed from monster drops, quests, etc. It would be slowly put into the system at the same rate it always has been.

The problem with ectos is that it has a variable worth. And your bartering, not selling. There is a reason why we dont use bartering as a basis for the real life economy. One reason is that an exact figure cannot easily be agreed on. 14 ectos for 100k? or is it 15? Who is getting the better deal? Who is getting ripped off? What happens when a new build to farm ectos faster in UW comes along? Or a content/skill update makes farming ectos harder? What happend to armbraces? See why its a bad idea.

Shadow Dragon · Nov 30, 2010, 06:39 AM // 06:39

i'm all for this, no item should take gold's place in game as a trade medium.

/signed

also nothing was said about changing drop rates on stuff like ecto.

so they will remain as crap as they've normally been.

Mia Clemons · Nov 30, 2010, 08:02 PM // 20:02

Quote:

Originally Posted by NerfHerder

First off, if the trade/storage cap were increased, a bunch of gold doesnt appear out of thin air. That gold would have to be farmed from monster drops, quests, etc. It would be slowly put into the system at the same rate it always has been.

Not entirely true. In the GW market, gold is a public yet unlimited good. As you stated, it can be farmed, bought, etc. I wont argue with you over its inherent nature; however, assume the following hypothetical example: There are many players with ecto in the game, some with substantially more than others. Also, assume that instead of trading between players, the ecto sellers sell their ectos to the Rare Material Trader. Now while you as a seller would get more profit from selling to a player, if the market is flooded with people trying to sell ecto, the demand will be relatively low, prices would drop, etc. Therefore, the safest and fastest way to get rid of your ecto(because of its falling price) would be to immediately sell to the trader. The gold that the trader gives you actually comes out of thin air. If you right now sold your ecto to the trader, it does not inhibit the trader's ability to pay me as i am also selling my ecto. The trader has an unlimited supply of gold. And if this chain of events happened on a large scale like the proposed OP said, it would undoubtedly have the results that every basic economist could predict.

Again though, this is probably a worst-case scenario. As a student studying economics, i feel that exploring the worst case scenario is necessary for understanding the big picture that this implementation could have.

gremlin · Dec 01, 2010, 12:35 AM // 00:35

Interesting "yawn" as economics are they don't really matter in the GW economy.
Real world price rises and crashes inflation and all the other aspects can and do hurt real people, destroy lives finish off companies cause mass unemployment and of course make a few very rich.

Changes have been made to this game loads of times and the economy and the players have survived.
Unlike real life the vast majority of the players didn't feel any serious effects at all.
A few made and lost lots of cash, those that dabble in such things either saw their imaginary wealth rise or fall.

There will soon be a major alteration to the game with the creation of Embark Beach and full hero parties, that will alter the game dramatically.

There is an alteration to Dervishes due soon that may prevent some of the dervish secondary builds from working as well which could affect prices.

For all you know after Christmas Ectos may be dead and people will be using some other material as currency.
This is bound to happen again and again when you move from the lockpick standard to the ambrace standard and all the other standards used to try to keep ahead of the game.

Solve the problem once and for all by making the coinage work, sure prices will alter but within a few months they will stabilise at a new level and the problem wont occur again because materials will be just that materials.
Their price will be determined by how rare they are and by who wants to buy them just as it should be.

NerfHerder · Dec 01, 2010, 09:59 AM // 09:59

Quote:

Originally Posted by Mia Clemons

The gold that the trader gives you actually comes out of thin air. If you right now sold your ecto to the trader, it does not inhibit the trader's ability to pay me as i am also selling my ecto. The trader has an unlimited supply of gold. And if this chain of events happened on a large scale like the proposed OP said, it would undoubtedly have the results that every basic economist could predict.

In your scenerio, the ectos are simply being changed into gold. The amount of worth everyone has if they trade in all thier ectos, is the same worth as the amount of gold they have now + ectos. If anything, they lose worth in this process, due to defalted ecto value.

Say I have 1mil gold in the bank and a stack of ectos thats worth around 1.5mil gold(6k an ecto). Combined I have a worth of 2.5mil, an amount I cant hold in my bank. If we get more storage in our bank, and I cash in my ectos for 1.5mil, I will still only have 2.5 mil gold. I would be no richer than before.

Worst case scerio is that a bunch of idiots panic and stop selling or increase prices for a month or so until they realize nothing really changed and they over reacted.

Rushin Roulette · Dec 01, 2010, 11:13 AM // 11:13

Quote:

Originally Posted by Winterclaw

Barter items should be something that always exist at a fixed price and have no other use than being able to turn in for the listed amount. Crafter materials shouldn't be pushed into exorbitant prices for artificial means.

Wait... this makes no sence at all. To barter means to trade goods for goods and agreeing to current prices of each item. I. e. Trading chickens for baked bread where as the 2 parties barter with each other to come out in a trade of 1 chicken for 5 loaves of bread tomorrow ine chicken is only worth 3 loaves. Both items have a flexible worth and have to be renegotiated every time.

In gw. an example of that would be trading party items for alcohol. Both items have a flexible worth because Party items may be 100g per point today and 130g tomorrow and Alc can be 60g per point today and 80g tomorrow

If you suddenly fix the worth of one item it is not bartering any more and you are trading normally with haggling. i. e. 1 chicken is worth 2 Dollars today and you agree on a new price of 1,50 Dollars tomorrow. The Dollars are fixed worth items and dont change in value because they are backed by the Government over a 3rd comodity which is the national Gold reserves.

In GW an example of this is trading Gold for an Opressor weapon. The worth of gold is backed by the amount that can be stored on an account/Traded in one session and the flexible part is the Weapon which might be 90K today and 50K tomorrow.

Spookii · Dec 01, 2010, 03:39 PM // 15:39

$20 bill =/= Ecto

A note's entire existence is solely for the purpose of representing value that is backed up by the government. A $20 bill is nothing more than paper with words that say "This is worth 20 bucks according to our system".

Ectos, however, have value outside of being another form of currency. They're material used to craft the most expensive armor in the game. They only drop from the most elite areas in the game. They won't suddenly become harder/easier to farm, in fact people may even stop farming them since they wouldn't need them anymore unless they planned on selling them. Which would decrease the incoming supply and increase the price of ectos that are already sitting in storage. But they would no longer be used as anything other than what they were originally intended to be used for: a crafting material.

I still fail to see how this is going to crash the economy. It would definitely fluctuate the price of ectos for a while just because of people panicking and liquidating or hoarding and waiting to see if prices rise, but things would pan out as they always do. I think that just goes to show how unsteady an unofficial currency is. Better to try to improve the system than to just sit with an unsteady one because it's most comfortable right now for a select group of people.

Mia Clemons · Dec 01, 2010, 07:40 PM // 19:40

Quote:

Originally Posted by Spookii

$20 bill =/= Ecto

A note's entire existence is solely for the purpose of representing value that is backed up by the government. A $20 bill is nothing more than paper with words that say "This is worth 20 bucks according to our system".

.....

Few things, yes i should've used coinage instead, for it actually has value whereas bills do not. My point remains valid though. Refer to above posts.

Second, the economy wont "crash", at least not to the degree i believe your aiming at. The economy will be unstable for a while until it balances itself out again. The point i was making is that it is unnecessary for such a change seeing as the market is already stable. Implementing the OP idea would cause market instability until it balances out. In the span of economics, if you already have a stable economy, you should NOT make changes that would otherwise make it unstable (unless circumstances permit).

Prince Rogrs Nelson · Dec 01, 2010, 08:01 PM // 20:01

Quote:

Originally Posted by Mia Clemons

Few things, yes i should've used coinage instead, for it actually has value whereas bills do not.

Too lazy to read everything else up til now (about 6-8 LONG new posts since I last caught up). But I disagree with this.

You really think there's something inherent in the materials that go into your coinage to make them worth their face value? That would suggest that the material in a dime is of far greater value, per ounce, than the material in a nickel. But go look up what they use to make nickels and dimes. It's all nickel and copper, in roughly the same proportions.