A Year Ago I Was Ridiculed For Suggesting BCs For Alphas

Communications Center General Discussion
81

In EVE it does create money, that is how money is created. And IRL, people translate time and electricity into bitcoin. As for customer and/or taxes, those do not create money either.

Not necessarily. The money supply must grow (assuming you don’t want deflation, which when large enough can be Bad™). Under a tax and transfer system it does not grow, and in fact, taxes impose a dead weight loss on the economy–i.e. there are transactions that would take place but do not due to the taxes–that is taxes make the economy, in effect, “smaller”.

Not quite. Suppose I want to start a bank. Well call it Teckos’ First Bank of New Eden (and set aside the whole “It’s a scam thing”). Suppose I raise 500 million ISK in capital from shareholders and 500 million ISK in deposits and CCP (the government) says, “Teckos you need to hold 10% in reserves.” That means I have to hold 100 million in reserve. That means I can loan out 900 million. Notice that in doing so…no money is created.

Try this podcast while you are commuting or the like,

Add up daily production.

This is neither here-nor-there when it comes to net production and the money supply, really. If net production is less than or equal to than the growth rate of the money supply then we see mild deflation. If the money supply is growing faster we see inflation. Hyperinflation is a bit different in that it represents a breakdown in terms of trust in the government and the money supply. It isn’t just really bad inflation, it is something more than that.

So what? Seriously if a new player is setting his sights on earning a PLEX to “play for free” he needs to go get an introductory econ text and look opportunity cost. If somebody can earn the cost of a sub in an hour or two, then do that and spend the rest of that time in game doing fun things vs. horrible grinding. And if possible, spend a few more hours working and buy a sub for a whole year and get a big fat discount.

No you innumerate, I showed you the growth rates. They are lower now than in the past. Further, what we are really concerned about is the growth rate in the real economy vs. the growth rate in the money supply. If the latter out strips the former then we get inflation, if not we get deflation, in the rare case where they are equal the prices stabilize…all other factors held constant.

Yes, you nimrod, and look, during 2016 and 2017 there are flat parts in those graphs, whereas in previous years there were not or if there were they were of much shorter duration.

So? That happens every month.

And I’ll notice you completely ignore all the graphs for inflation. Do we see inflation graphs similar to the money supply graph? No. Not in the least. In fact if you were to regress inflation on the money supply you’d probably get a shitty fit.

There is no evidence here. None.

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82

I didnt ridicule you then but i’ll take the time and do so now.

This post is pathetic and sad.

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83

Huh you know how many deals Chribba runs daily?

You then should know that he is a king of veld/trit…

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On the contrary. You can hold the entire 1 billion in reserve and loan 9 billion - which you create as demand deposits for the people who take out the loans. You only need to maintain the reserve required for that liability - not the full amount.

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85

Wut?

I have 1 billion. Reserve requirement is 10% or 100 million. Thus I have 900 million to loan out. Where’d you get 9 billion? If you are thinking that that 900 million goes into say another bank and 810 is then lent out, and so on…you are not taking into account that there are both assets and liabilities. That 900 million that goes into another bank is essentially a liability for that bank and are part of my assets. Thus the net effect is zero.

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Just because CCP did it doesn’t mean it’s a good idea. Far from it. It remains a stupid idea, and the last laugh will be when CCP realizes their error and either pisses off their now mostly-alpha playerbase by taking the new shiney stuff away, or just accepts the mess they made by leaving it.

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87

I think they are looking to the daily skill injectors to generate more revenues. After all to get a full 30 days worth of training out of them you need to spend 600 PLEX vs. 500 or even less for a sub.

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Lol, you really have no idea about real life economy, do you? Let me make this as simple for you as possible.

A bank that wants to loan out 1 Billion, never ever needs to have 1 Billion at hand. A bank that wants to loan out 10 Billion, never ever needs to have 10 Billion at hand. Whatever a Bank has at hand and puts into reserve, they can use as the reserve requirement, which was 10% in this example. At no point do they have to be in possession of the money. @Teckos_Pech you might need to read up on basics of modern economy.

@Do_Little: given the 10% example, if you have 1 Billion in reserve, I thought you can actually create 10 Bil and not 9, or am I wrong?

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I have a course on money & banking but it’s been a while so I am taking it again to make sure I don’t end up chewing on my foot.

if anyone is interested - don’t pay full price - if will go on sale at least 70% off.

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90

The actual process is the bank loans 9b from the money markets. Not the bank invents 9b. The nature of the banks loan book itself (ie how risky it is) affects how much actual capital it will be able to buy.

10:1 is just a random figure, but it represents the requirement that the bank be able to service its own loans (or in the old school saving and loan era, field a run on the savings), whilst it liquidates bad loans secured by salable assets from its loan book.

Teckos is misunderstanding the purpose of the buffer - any investment organisation that is not funded by loans would probably loan virtually all its money out, but to enough targets that the repayments from one could fund legal action against another.

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Me :smiley:

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Im laughing, ccp listen you, wich is wrong. Why they are not playing the game anymore. Confirmed.

VNI is the most op ship for alpha, so op you can become omega in a week end, this game has been always free to play, you just need to discover how. We know new player generation wanna go fast, wich is not case in eve online. The thing about alpha could be a nice way to be omega true achivements, not about “ok kid go hurricane enter FW becouse you saw some suitonia video” you will die and leave game, comet gangs will kill you. Bigger the loss, bigger the frustration. We dont want to care about the new player, why? They dont hear, they think they are pro, they die with stupid decision and blame game mechanic. AURORA NEED TO BE IMPROVED TO BABYSIT PLAYER . PVE content need to babysit player. Rockie channel was a very good tool, put it back.

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A commercial bank in most countries will have to maintain a certain amount of its deposit liabilities on hand. This is typically a central bank regulation. This money is kept in cash (which can include reserve deposits).

As for various economic multipliers I tend to be skeptical of their supposed magic…err effectiveness. Most of these economic multipliers assume the economy is equilibrium…but that in and of itself is skeptical, IMO. Seriously, if these magical multipliers really worked like the textbooks say they do how come a small bit of extra spending or money creation does not bring a recession to a screeching halt and usher in a boom?

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If you take out a mortgage to buy a house, the bank will create 2 accounting entries. The mortgage itself is an asset and the demand deposit for the seller of the home is a liability. The bank needs enough cash to meet the reserve requirement for the demand deposit. For a $100,000 mortgage, the bank needs $10,000 in reserve if the regulator stipulates a 10% reserve requirement. There is no actual cash in the demand deposit - it is simply a promise by the bank to pay on demand using it’s reserves or borrowing from the central bank if reserves are inadequate.

This increases the money supply but it is tied to a real world asset - the house. As long as newly created money is tied to a tangible asset, it reflects growth in the economy and is a good thing. It isn’t really being created “out of thin air”.

Banks have an income stream as people make payments on their loans and this is normally enough to cover withdrawals from demand deposits. If it isn’t, the regulator can adjust the reserve.

When the money created doesn’t reflect growth in the economy i.e. when central banks buy government debt - money is devalued and we get inflation.

Inflation requires scarcity - too much money chasing too few goods which drives up the price. In Eve the only scarce commodity is PLEX since it can’t be created in-game by players so this is where inflation occurs.

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95

This is arguable.
I dont know much about banking regulations, but I dont think commercial banks need to maintain an actual cash reserve. The liability can be covered by various in/tangible assets. Certainly the trend into the 21st Century is that that collateral/reserve is increasingly intangible or in volatile assets like stocks.

In any case, central banks lend at interest rates to commercial banks below the rate those commercial banks offer to clients, even to the point of creating money virtually towards that purpose. Commercial banks then proceed to make loans to other banks, in a perpetual cycle where nobody really ever pays anyone else back, instead, just take overlapping loans ad infinitum (till things somewhere go sour, someone defaults, and the entire system verges on collapse unless the central bank bails them out, again, with tax money.)

Same can be said of foreign debt IRL. If some major lender/bond owner was to demand the US to pay their debt immediately, rather than extending them indefinitely as now, or issuing new ones, the whole house of cards would come tumbling down. Inflation would be immediate, severe and cascading as everyone tries to get their loans paid up/sells off their dollar reserves, whilst the US Federal Reserve issues virtual dollars by the trillion. Defaulting is not an option, as the result is nonetheless the same as above. Dollars wont be worth the paper they are printed on.

Nobody wants that, so nobody bothers the US about their debts and just lets it slide, for now.

PS: I lived in Moscow in the 90s. The US flew in cargo planes filled to the brim with dollars, cash, non-stop, for months on end. Look at how that panned out.

We have wandered way off topic:

Is there any reason to think Alphas will generate more isk/resources to a substantial amount?

Inversely, is there any reason to think Alphas will increase resource destruction and isk sinking?

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96

This warms my heart to no end, although I wouldn’t put too much thought into it, the eve community is famed for being staunch supporters of a static universe, I can’t remember when any ideal put forth was welcomed, good ideal, they hate it, bad ideal, hate it, never do I recall a discussion on the merits, suggestions, tweekers, or some positive imput, always two answers, no, or troll.

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97

I remember being ridiculed years ago for warning PLEX was out of control (or being massively manipulated by CCP) and would soon break 750 Million, even 1 Billion ISK to PLEX an account.

Meanwhile bounties are literally worthless now.

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First off, the money multiplier effect is, IMO, nonsense. Feel free to continue to believe in it, but since bank reserves have increased dramatically we have not see a commensurate increase in the money supply. Frankly, these things all strike me as a bit of magical thinking, an economic perpetual motion machine if you will. And no I don’t believe in a Keynesian fiscal multiplier either, at least not one greater than 1. I am not alone in this,

The Keynesian Illusion, by David Levine

Money, Reserves, and the Transmission of Monetary Policy: Does the Money Multiplier Exist? by Seth B. Carpenter and Selva Demiralp

Hahahaha, no. Everything in the game is provided by people giving up their time, much like IRL. So there is not an infinite or unlimited amount of minerals, moon goo, etc. There is indeed scarcity, if there wasn’t then nothing would have a non-zero price except PLEX.

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When the Alpha changes came I was a little salty, but since I’m now getting blingy faction BS and BC kills off of alphas who do derpy stuff like put heavy missiles on a navy issue megathron I’m completely ok with it.

In fact I encourage more Alpha pilots to walk the path of tech 1 fitted battleships, and I invite them to come rat in Syndicate.

100

Do you have one of them fancy graphs that uses a per-active-account divisor? Average active player count over that 2012 period was ~40,000. Average active player count over that 2017 period is ~26,000.

So divvying up that ISK accumulation per player and accounting for a 35% decrease in players…I think you start to see some different numbers which will lead you to some very different conclusions.

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