Now I’m confused about who’s right. I do know for a fact that the topic is inflating the reply count!
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It’s not in Eve. For the reason you gave (money is created by an activity which a constant supply of isk).
Not exactly the same as food, energy and housing though. Players can modify their behaviour to make ships, mods and ammo cost them almost nothing.
Even new players can easily sustain themselves with ammo and mods. And T1 ships are easy enough to build. All the materials are available in hi-sec now.
And that’s kinda what i hoped for. When null blocs threatened a T2 strike i was looking forward to a big shift to T1.
in the real world, governments also destroy money on a daily basis while hey continually produce in order to maintain a certain about in flow. i dont know what that ratio is money made vs money destroyed is though.
Government treasuries and central banks destroy money to remove damaged or outdated (read: more easily counterfeited) notes from circulation. It’s not necessarily a function of monetary policy.
In such a scenario, the money supply is contracting, and you have an increasing amount of money out of circulation (being locked away) and less credit being extended. Central banks target low inflation rates for a reason; deflation can spiral out of control and an extremely low inflation target (i.e. less than 2%) can easily be undershot into deflation.
Heh.
Chaos? If they wanted Chaos theyd crash the entire market and make t1 ammo cost 15m a shot.
Eve would have become a game of t1 lasers and drones…
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A madmax wastleland where the toughest or smartest survive
Cos those drones need replaced too. 80m a piece lights
Maybe Abaddon will become relevant again in such a crazy world…
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But it has Mymetic drone skin set to on
Deflation.
To protect debtors so that debtors don’t get wiped out or learn to protect themselves (by behaving rationally).
What you are talking about is the manipulation of the currency by the sovereign. Forcing any particular value onto the currency is manipulation, by default.
What’s more, you are not giving a good reason that this should be done, or rather, you are not stating the very good reason that central banks do it: to allow the sovereign to run budget deficits.
But there is no deficit spending in EVE, so why should the central bank (CCP) force the currency (ISK) to inflate?
All this and you didn’t answer the question you quoted. I’ll answer it for you: in a deflationary scenario, you acquire (hoard) money by producing goods and services at an accelerated rate and exchanging them for money or using them as a secondary currency to conserve what money you have.
Production does not go down. It goes up.
Inflation in countries where the central bank uses inflation targeting is rather predictable, it does not deviate wildly from the inflation target. Creditors factor it into their interest rates as a result.
Monetary policy is separate from fiscal policy virtually everywhere these days. Central banks use inflation targeting to allow plenty of room for economic growth while maintaining price stability. Governments can run budget deficits regardless of the central bank’s monetary policy as long as their bonds are considered low-risk by investors.
What’s the rate of return here? When literally holding money in a safe has a positive rate of return, there isn’t a lot to invest in producing, risking holding excess inventory that costs money to keep.
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I think I would be interested if I had over half a trillion ISK. A 1% increase in my purchasing power would yield a substantial amount of plex. It would be like having interest on your accumulated wealth. But alas…
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This is actually a good point relating to behavioral economics - i.e. we cannot assume people will act rationally (hoard isk any more than they already do) even if there is significant deflation. The ISK-rich would probably be more inclined to keep their ISK, though.
The problem with that is nobody is buying your goods because everyone else is trying to hoard ISK as well.
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That’s assuming plex price decreases too.
The thing is, deflation does not mean ALL prices do decrease.
But yeah, it’s easier to plex an account when the price of plex decreases, assuming you gain raw isk and not items that you then resell.
It’s only rational to hoard isk when it is a goal in itself. That is, when you don’t want to enjoy the game. Otherwise isk is a resource that you acquire at varrying rate and use at varrying rate. Need more isk ? farm more. Need less ? farm less.
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This is the problem with deflation…
Of course is can. But will it? If the overall belief is “no” then it won’t. The number of players ratting and thus injecting ISK into the game is a “game” in that players consider what other are doing and formulate a “best response”. And if more people start ratting the best response might shift over to not ratting.
NPCs only “give ISK away” to the extent that players are willing to trade time for that ISK. With the blackout it looks very much like the answer is “No.” that is trading time for ISK became much less of a thing.
The problem is in terms of producing goods. Suppose I can transform raw materials into goods and at the same time earn say 10% on my investment. But if my investment cannot return a positive rate of return then why make such an investment. When i look at making t2 125mm autocannons and teh return is less than simply holding ISK and enjoying the benefits of defaltion then I stop making t2 125 gatling autocannons.
If you really believe that then you cannot talk about inflation and the money supply as that too is based on real world observations.
No they don’t. They rat because it provides a greater benefit than not ratting. Look at the data. The money supply has shrunk. Why has it shrunk? because people who would have been ratting stopped.
Of course there is a cost of living. You want to mine you have to incur certain costs associated with mining. You need to buy a given ship, mining lasers, maybe some crystals, etc. Same if you want to rat. You can avoid a “cost of living” if you do nothing and simply sit in station in your pod. If you don’t want to do that you’ll incur additional costs.
Suppose deflation is say, 10% per month. Would you be happy? Probably not at people would not be willing to buy anything at all. If you mind X nobody would want to buy it because next month it would be worth 10% lesss.
This is why deflation lead to the great depression. If you buy $500 of raw materials but after selling the final product you only earn $350 you cannot bay your suppliers and you go out of business. This is going to be true in EVE too.
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That’s because you wrongfully call deflation the case of moving from a stable isk value to a stable other one that is lower.
I’s not deflation. it’s a change of balance.