I wouldn’t buy with the intent to sell later. But I’d still buy with the intent to use anything that i didn’t want to make myself.
I understand a lot of trading would slow down. But i honestly don’t think it would stop. And many isk faucets such as incursions and mission running would also not stop, in fact they would probably become bigger faucets as players migrate. It’s unlikely they’d fill the gap of null bounties, but they’d stop the economy deflating to zero. It’d find a new equilibrium.
This.
Inflation is simply a hidden tax on all current and future savings. It’s pretty brutal. Look at what anything cost 100 years ago, then 50, then 25, then 10. People go along with it because they simply don’t understand it. They think of inflation is some kind of natural phenomenon like a hurricane blowing through and don’t understand it is manipulated (to someone’s benefit, and your detriment).
Nobody has any business tinkering with the money supply. And give me deflation any day of the week over inflation.
There are plenty of examples that contradict this. For instance, the cost of housing in my hometown pretty much hyperinflated in the 2000’s, but I’m sure you would have an explanation for every example, something like “Inflation is when all the prices go up, not just [class of goods or services] prices.”
Because the government says so?
If I were a government, I wouldn’t tell people I was printing money (inflation) or annihilating money (deflation). But if I were a government seeking an advantage over other governments, I sure would make more money for me and give it to myself. And there might also be good reasons to destroy money and not create anymore to replace what I destroyed.
For some people and organizations, money is simply ammunition. Do you think the US Army wouldn’t print money for reasons other than “sound monetary policy”?
Money is a tool of the sovereign. It serves the sovereign. If you think the central bank can defy the sovereign, then you don’t understand the concept of sovereign.
Two things:
If you want “investors” to “invest” in your money, by buying your bonds, then you have to convince them that your country is not a fly by night operation AND will not arbitrarily change the terms of the agreement.
That doesn’t meant you AREN’T a fly by night operation or you WON’T change the terms of the agreement.
Consider CCP and PLEX in this example. Crowd Control Productions has been around, what, 2 decades, making EVE Online. That’s older than some countries. And they haven’t pulled the rug out from under us yet with regards to PLEX. If anything, they’ve worked to make it more valuable by increasing its utility.
Holding money in a safe never has a REAL positive return, only a projected positive return. If you actually want to buy a cheeseburger and a pint, you have to sell that money (i.e. exchange it for what you want). In other words, it can’t all sit in the safe.
People who have loads of money already hoarded it before deflation. Deflation makes it marginally easier for them to hoard it because less of it is needed to cover operations, but it’s not like Scrooge McDuck is going to start playing fast and loose with his wealth just because the government is printing itself more of what he has. What is actually going to happen is that he’s just gonna turn that money into something else, like cheeseburgers and pints of beer (or the means to produce such). Government can’t really print THAT. So the relative scarcity of its utility increases with respect to money (inflation) when government abuses its authority to create money.
In an inflationary scenario, Scrooge gets the means of production using his money. In a deflationary scenario, Scrooge gets money using his means of production. What’s the difference?
And so do your suppliers and their supplier and their suppliers . . . THE SKY IS FALLING!
In reality, the supplier has to work with you because the alternative is sitting on $500 worth of merchandise that will soon be worth nothing. Unfortunately for the Scrooge McDucks, the invisible hand (of free markets) will soon be what is gripping their throats in this scenario. The person who said “Let them eat cake.” lost her head. But I’d bet many bakers and wheat farmers just kept on truckn’.
Economic models seem to behave far less rationally than actual people.
Fortunately it is only an urban myth Marie Antoinette said that and is not supported by any respectable source.
Indeed, it was pretty much propaganda pilfered wholesale from the works of the philosopher Rosseau, who wrote it down a few years before Marie Antoinette ever arrived in France and nearly 2 decades before the revolution itself.
Your total compensation is your income, some of it is just in kind and in the US is currently not taxed. Like the mortgage interest deduction, that basically does not tax the rental value of the house you live in. The federal government could tax that, but the idea was to promote home ownership. The same could be true of healthcare benefits. If your employer gifts you a new car you pay taxes on it since the cost of that car is treated as income.
No. It was an outgrowth of wage-price controls during WWII. Employers couldn’t find workers because they couldn’t raise wages due to the aforementioned controls put in place the the Roosevelt Administration. So businesses asked if offering health benefits would violate those controls. The Administration said, no it would not, and so they did. And when you start separating consumers from paying for the things they consume those costs become harder to observe. Imagine if employers started paying people more wages but cut off the healthcare benefits. That is suppose a worker is getting $10,000 in benefits and $40,000 in wages. But the employer says, “Now we give $0 for benefits and $50,000 in wages.” Workers are indifferent right? Probably not. First they’d pay taxes on the $50,000. Suppose the average tax rate is 20% (easy math) so they pay $10,000. So their take home pay is $40,000, but we subtract $10,000 in health care now it is $30,000. And this worker has to write a big fat check for $10,000. He’d be worse off and really pissed. Because back in the employer-provided health care world his take home pay would be $$40,000 less the 20% in taxes or $32,000 plus the benefits which are paid for and he is not taxed on. Further, even if taxes were not causing this kind of thing, suddenly coughing up $10,000 for health care would likely really piss him off.
It would likely be the same story with taxes. It used to be come tax time you figured out your tax burden and wrote a check. But then in WWII the government needed the money much sooner than that. So a young government employee suggested that the government have firms withhold a certain amount of money from workers paychecks and send it to the government every payday. Revenues came in faster…all good right? Some have suggested that if we went back to the way it was people would not stand for writing a check for about 33% of their taxable income every year. Imagine if you made $60,000 and on April 15th you have to write a check for $20,000. Every year. My guess is people would start wondering, “What in the honest f–k are you guys spending that money on each and every year?”
What? Where do you think income comes from. For many workers it is wage*hours. And benefits are often tacked on, but if we wanted hourly compensation you’d calculate implicit hourly compensation by taking compensation/total hours worked.
And yes, some companies respond to various policies by hiring part time employees. Incentives pho-king matter. Raise the minimum wage creates an implicit incentive to economize on labor. All firms try to minimize costs…all costs. Even when you try to stop that they still look for ways around it. So you raise the minimum wage, but policy means you don’t have to pay benefits to part time workers you fire your full time worker and hire two part time workers. Same amount of labor, but now you save on the benefits. Hence the law of unintended consequences. Another option–hire a worker in another country. That is you fire your prep-cook who chops vegetables and does other prep work in the kitchen and buy stuff that is pre-prepared from Mexico and shipped in. You’ve effectively hired a Mexican worker or workers. Or switch to more capital less labor to the extent that they are substitutes.
Change relative prices you change the outcomes. That is an iron clad law of economics. Yet people are shocked when it happens. To the economist it is just what they expected.
Indeed they often do.
Those are not counted in their total compensation. The people at the Bureau of Labor Statistics are not that dumb…
Yeah, I’m sure everyone would stick around and keep playing. This is what I mean. You change things people react to them. If having all your stuff deleted by Dev Fiat happens I’m sure everyone would just go “that’s EVE” I’ll start all over. No. They’d be pissed and they’d likely redirect their leisure time elsewhere. This is a game and it is based on people having free time and some money to spend to enjoy that free time. Suddenly make it a whole lot less fun and my guess is people won’t stick around.
People typically make decisions based on (marginal) benefit vs. (marginal) cost. If you have 4 hours of leisure time and rat for 2 that tells me whatever else you had to do with that leisure time became more attractive (i.e. the marginal benefit of ratting was equal to the marginal cost, so you stopped ratting for now).
That is how the in-game markets work. Everyone uses RL arguments logic, but then they write nonsense like this.
If you could get as much RL benefit for crashing those cars it would happen. Thing is insurance contracts and laws are different IRL than in the game. Economics looks at laws, institutions, and even culture (well some economist look at those things). Douglas North won the Nobel for looking at institutions. So did Ronald Coase, Oliver Williamson, and Elinor Ostrom. In fact, these four economists were instrumental in creating a new school of economic thought call the New Institutionalist school of thought. Where institutions–i.e. the rules of the game–matter.
You are making an inchoate argument that the rules of the game are different between RL and EVE. Nobody disputes this, at least I am not.
For example, there is no way for players to enter into a contract and to enforce it like IRL. IRL, you violate a contract I take you to court, lay out the facts. A judge looks at them and makes a decision. If indeed you violated the contract you pay. If not, the government’s armed agents come to you and take it. If you resist they ramp up the degree of coercion to violence and may even kill you if you resist enough.
There is no such mechanism in game. I’d have to do it myself of pay someone to do it. And even then it might actually provide you with content and be “fun”. And you can completely wall yourself off from paying by dropping to a noob corp, or not putting any assets into a place like the corp hanger. And keeping your money out of corp wallets. It is very, very different sets of rules…so we see very, very different outcomes. It does not mean economics is irrelevant, it means you have to be aware of these institutional differences. So when someone asks, why isn’t there a player created bank? There is no institutional structure for it in game to allow it to emerge. Same with a player driven stock market or a player driven insurance company. The lack of these things are actually predicted by economics.
Ranting is against the forum rules btw
TLDR but income = money received, especially on a regular basis, for work or through investments.
No. Income includes money, but it also includes non-monetary compensation. If I give you a car (say as part of your benefits) and the IRS learns of it, they’ll show and say, “Here is your revised tax burden along with fines, penalties and late fee if you use it for anything other than business. Pay up.”
Okay at this point you’re just playing a shifty game with tweaking definitions around, equivocating wages and income with “compensation” and benefits and some irrelevant stuff about taxes. I get taxed for owning a car, but a car is in no way my income. Weak sauce.
Income is the money you earn, in dollars. That’s what it says on my income taxes anyway! Take care peck.
Housing costs have grown faster than inflation in many US metro areas for years. This doesn’t mean that economists are understating the inflation rate, it means that some markets simply don’t have enough housing for the number of people that want it.
The people screaming that the sky is falling and that inflation is understated sure seem to ignore that a huge number of goods have seen their prices fall or at least rise slower than inflation.
If the government prints loads of currency and shoves it in a vault somewhere, it has absolutely no bearing on the strength of the US dollar because it’s not in circulation. You cannot print trillions of dollars and put them into circulation without anyone noticing.
The “sovereign” in modern countries, in the context of monetary policy, is typically the national legislature. As long as legislative parties agree to maintain the independence of the country’s central bank, an agreement on which hinges much of the government’s ability to sell its bonds and maintain a strong currency, which is essential for any country that depends on imports (i.e. all of them), the national legislature will avoid interference with monetary policy. This is a norm that has persisted in most advanced economies for decades.
I don’t think the US Army would be printing money because that’s not a power delegated to them or the Department of Defense by Congress.
Yes. A real world example is the federal government of the United States, which has not defaulted on its debt even once since its creation in 1776.
Uhhh no, let’s say you pick an arbitrary year (say, 2000) and establish a benchmark dollar based on what one dollar could buy that year. What a dollar could buy in 2000 is what $1.49 (or so) could buy today. In a deflationary scenario, holding $20,000 in a safe means that what your $20,000 could buy when you shoved it in the safe is less than what it can buy tomorrow, so yes, it does have a real positive return.
People with loads of money don’t “hoard” it under inflation the same way they would if there was deflation. Their money goes into various investments to keep pace with, or beat, inflation. Those investments are productive - they produce goods for people, they create jobs, they add liquidity to markets. Hoarding money in a safe is very different.
The difference is that the productive capacity of the economy stops growing.
Nice, you learned how to link a Wikipedia article. A true scholar!
Can’t wait for them to block each other.
So, then, what good is the concept of “inflation” if it can’t actually tell me anything about the price of . . . anything?
“If” ← lol
If the government prints loads of dollars, I can pretty much guarantee you it is going to affect the “strength” of the dollar.
You’re starting to sound like quite the pollyanna.
“can’t” ← WRONG!
Also, people are dumb. They don’t even know where money comes from. They’re pretty much just fancy, tailess monkies. I bet you could take one, stick it’s brain in a jar attached to a bunch of electrodes and submerged in some nutrient rich solution and it wouldn’t even notice. It would just keep playing EV . . . errrr . . . life. 
So, what you’re saying is that people like Nancy Pelosi and Mitch McConnell control the world’s reserve currency . . . and that is what makes people so confident in the USD. Is that what you’re saying?
Nancy Pelosi > Hey, Mitch, should we keep getting free money by inflating away our debt?
Mitch McConnell > Sure.
lel, quit trolling.
Are you a Russian troll or what? They can just phone the Treasury and have them print it. And, I didn’t even say they would print dollars. If I was going to debase a currency as an act of war, it wouldn’t be my own’country’s currency, you filthy scrublord.
Did your chain of command authorize you to disseminate this propoganda here given the potential for collateral effects on friendlies in this thread and on these forums?
#shootblues #RIPVileRat
Yeah, I mean . . . if you ate $20,000 today and it deflated tomorrow, you’d be hungry but $10,000 would be just as filling as eating $20,000 yesterday.
#real
They don’t hoard it at all in an inflationary regime. They hoard things you buy with money to make money. Those things are gaining value with respect to money. They only hoard money during deflation, and really only severe deflation. But why are we basing an entire economic model on a small group of hoarders? lol
The productive capacity of society only stops for a few reasons and “not enough money” may occur coincident to many of them, but it is not causal.
If I can’t sell my coffee beans for money for a cheeseburger, I’ll sell my coffee beans for a cheeseburger . . . or a cow.
You actually started to see people buying/selling things for/with PLEX recently, rather than ISK. Gold, cocoa beans, cattle all work fine as “money”. Look at Bitcoin.
Money just helps us know what to trade for what.
This is a really dumb conversation, but no, the US Army cannot phone the US Treasury and demand they print more money. You might want to review the Constitution, or at least read a Wikipedia article, before you start telling everyone how the government works.
Confirmed, the "Marie Antoinette said “let them eat cake” story is derived from a Rousseau story about the time he got drunk and ate brioche (which is not cake), which is itself derived from a story about Louis XIV’s wife Maria Theresa.
The US Army can blow up your house, with your kids and your poodle in it.
WTF are you guys smoking?
These are not my definitions. You just don’t know what you are talking about.
No, it is not. You are just flat out wrong.
Indeed, housing costs are part of the CPI. Anyone can check this it is part of the Public Use Micro Data at the BLS website.
Or check out this voodoo…
or this voodoo
Crazy, eh?
Considering that there is a significant amount of the Austrian school in my responses it seems to reflect rather badly on you for not spotting it…
