conqueror vs. Economy

DestroyTokyo - Lost City wrote: »

So, I can safely assume, I'd hope anyhow the Spectral in this thread are in my age vicinity of 18-20 years old.. @ least... Now I find it terribly hard to believe you can speak so freely on a topic (PWI's economy) With being so little informed on the topic of how economics actually work? Honest to god have none of you ever taken a class on the matter?

It's one thing to have some sort of legitimate argument to be presented here on the forums but for christs sake it's like you're just spouting blind ignorance to try and justify your hatred for a guild in a video game.




All I really have to say to this post since it's been blatantly pointed out you know absolutely nothing is this

http://i35.tinypic.com/nz5ahd.jpg

rhapsodus wrote: »

i just want to point out, a coin sink is a mechanism to drain coin out of the economy and throw it into the deep abyss. whether cq owns the land or not, the coin is still coming in regardless. it's just a matter of who's hand it is in.

a quick example.

CQ owns all the land they do right now. Therefore CQ earns 470m a week in income.

CQ owns no lands. CQ earns nothing in income. Other miscellaneous guilds earn a grand total of 470m a week in income.

As we can see by my brief examples, regardless of who owns the land, that money from tw is still injected into the economy every week.

of course, in the short run, this spurs consumer demand because they all of a sudden have more money to purchase good and services with. however, if the inflow is not slowed or halted at some point, there will be a point where the value of coin starts to go down due to an overabundance of it. too much demand and not enough supply will generate demand-pull inflation, which is what we are currently experiencing.

that is why the united states introduced the stimulus package following the collapse of the economy. putting more money in people's hands encourages consumer spending. coupled with the multiplier effect, it ultimately gives corporations more revenue, and therefore more money to expand operations and hire more workers, and the economy starts recovering (in an ideal state). however, sooner or later, the increased consumer demand will start pushing prices higher, and that's when the government needs to step in to either raise interest rates or slow down government spending. in our case, we need a coin sink, something which we dont have.

Now let us extrapolate on the two examples a bit.

5 years from now, CQ keeps getting money from land. Due to a lack of a coin sink, the money circulating the economy perpetually increases, and the value of it is on an ever-decreasing spiral.

5 years from now, miscellaneous guilds keep getting money from land. Because we don't have an effective coin sink, the money circulating in random people's hands keep getting more and more. therefore, the value of coin still declines.

After extrapolation, we can see that regardless of who owns the money or not, it does not change the fact that there is a real lack of an effective coin sink. when inflows are greater than outflows, the amount of coin starts to build up. and once the coin becomes so common that everybody has a few hundred mil to throw around as change, it totally loses its value and loses scarcity.

and that, is the heart of economics.

economics is the study of how a society allocates its scarce resources among its many wants and needs. resources only have value because they are limited, and they are scarce. like you said, air is free because there is an abundance of it. if you forbid me to breathe here, i move 3 metres away and breathe there. there is no lack of air.same thing with coin. because we dont have a coin sink, coin becomes less and less scarce. once it becomes so readily available, it loses its value.

this can be seen during the post world war II era. Germany was in a huge world debt following the aftermath, so to pay off their huge debt, the simply printed out massive amounts of money. This gargantuan sum of money was injected into the economy.

the result? everybody was walking with wheelbarrows full of money. it costed something like a billion deustchmarks to buy bread. in the end, people just dumped out the money and traded the wheelbarrow itself for goods and services.

this shows that it doesnt matter who is holding the money. as long as the collective amount in the economy is growing at a spectacular rate, inflation is inevitable.

once again, this expresses the dire need for an effective coin sink, which in turn has nothing to do with cq themselves. cq is not a coin sink, and neither are other players. coin going from hand to hand isnt doing anything. coin being eaten up by npcs is a coin sink, and we need some sort of event to spur that kind of thing.

Xtacy - Lost City wrote: »

I must say there has not been 1 point where I agreed with someone 100% the way I do with this last post you did rhapsodus. It's true.

Even before we owned the majority of the lands and the AH gold prices were fine. Even way before that the map was filled and in total I think the server recieves about 500-510m a week because all the lands are taken. This has been like this ever since the server was filled with color (The map obviously)

I'm glad you pointed this out because as I was reading it I was thinking if we sold to npcs then that could dump some of the money and you brought it up.

Alright then, I think you basically ended the thread with this... b:victory

P.S. I never actually went as far as to read all of someones post that long