Deflation Continues (in General)
March 29 2005 1:37 AM EST
The value of the Carnage Blender monetary aggregate (the equivalent of M1 :D ) has actually been declining for the last few days if memory serves, from $500m to $496m today. Given that the blacksmith and purchase of BA surely combine to form the majority of outflows, much of this can be traced back to the new fight rewards and high demand for enchantment. The new tattoo artist probably contributes as well, but the delta out of ToJ's or into ToE's, a good proxy for use of the artist, has been surprisingly small.
That represents nearly a 1% decrease in the monetary base. Couple that with an increased rate of new subscribers and more active players, and CB2$ are more scarce than ever.
Trade's getting painful. Lots of auctions are expiring. Please, we need liquidity!
So save your money and wait for better times.
Don't save your money for better times- with less cash, its value will rise. So spend all you can now, and wait to start hoarding when it becomes worth less. Or at least that's how I see it, but I am in a state of lack of sleep.
March 29 2005 1:50 AM EST
If everyone decides to hoard their money, trade locks down, and we have the functional equivalent of a CB recession, which can't get bad as it's blunted dramatically by the fact our fight rewards don't depend on us buying blacksmith/BA services, thank goodness.
It's obviously not a bad strategy for the individual, but the job of a CB central bank would be to discourage this on a systemic basis. Hoarding is not a really pleasant thing for markets, which like people buying and selling stuff.
Vaynard: Don't save your money for better times- with less cash, its value will rise. So spend all you can now, and wait to start hoarding when it becomes worth less. Or at least that's how I see it, but I am in a state of lack of sleep.
-The problem, Vaynard, is that people around these parts tend to view prices in quite narrow terms. Most of the time the number of zeros is more important than the value of the money itself, and with that in mind many possible sellers will hold off on lightening their inventory.
While money might be somewhat more valuable at the moment than during periods of inflation, prices won't necessarily reflect that idea. What economic forces might suggest in theory doesn't always translate into reality, and and in this case CB's economy is an example of that.
March 29 2005 1:59 AM EST
"While money might be somewhat more valuable at the moment than during periods of inflation, prices won't necessarily reflect that idea. What economic forces might suggest in theory doesn't always translate into reality, and and in this case CB's economy is an example of that."
Excellent point, Dr. Arsonist. The current value of items and money depends greatly on their anticipated value, and many economists feel that the expectations of people with regard to inflationary trends are more important than the trends themselves.
Have you checked FS/wtb recently, quite a lot of activity there
Maybe this is a unimportant sidenote, but try to take into account the amount of CB1 being sold for CB2, and that might also be contributing in a very complex way to this economy as well. Seeing as the CB1 economy is still very strong it seems, even if not many people are playing it... or are they? ;)
March 29 2005 2:06 AM EST
" Have you checked FS/wtb recently, quite a lot of activity there "
Also interesting, but I think to the contrary, this serves to reinforce that the CB2$ currency is having issues. The majority of the threads by my count are dealing in USD. This can't be done in the auction market and would naturally nudge people towards the FS/WTB board.
March 29 2005 3:32 PM EST
Agree with you there mags, far too much USD sales for my liking. Seems the only way to get rares is either by buying directly with USD or buying enough CB2 to actually be able to afford one.
I inspect many characters on any given day to update my fight list. I find most have more than 300K stashed away (at 100K PR or less). Suggests to me there is at least a little hoarding going on.
March 29 2005 4:17 PM EST
300k is only a small fraction of what a new piece of equipment costs when a rare costs > $1M CB, and some of them are >$2M CB now.
March 29 2005 5:41 PM EST
$494.7 million right now.
I'd just like to re-iterate the point made earlier that people *hate* taking a nominal loss on items they purchase and resell. Hate. Adding some inflation allows them to see the same number of 0's and still transfer the item for a decreased real value.
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