Fiat Currency

[Sobotnik 365]

I have noticed from my time playing in wurm that the currency is horrifically deflationary, and the recent price changes look as though it's going to severely damage the silver currency. The fact that currency has multiple money sinks seems very damaging when the creation of actual money is going to decline in the future.

 

I would propose introducing a fiat currency. It would be printed when needed, in order to cover expansions and contractions in the wurm economy. It would not be needed for things such as deed upkeep, but generally for trade and capital with regards to other things (cotton, meals, ships, weapons, armour, tools, etc).

 

As it stands, the present currency is going to undergo a deflationary shock. If a currency that isn't tied to silvers/deeds/etc (so players can use it for day to day business) then it would massively help players to invest into each other, buy their needed goods, and make people more willing to spend money and generally buy things (many friends I know are unwilling to spend).

 

Thoughts?

[Aetherwalker 1,863]

Why not just fix the current currency rather than making a new one?

[Sobotnik 365]

Why not just fix the current currency rather than making a new one?

Because the existing one is pegged to the euro and is created by people buying it. Unfortunately, this means the money supply cannot be controlled easily.

 

As it stands right now, the deflation is going to take most control over the economy out of the game developers hands and it's going to enter a deflation spiral.

[ReaverKane 363]

Wurm Currency and the economy has stood up for like 8 years of game that included the wipe of entire servers... It should be able to handle the price change.

There would be better ways to deal with it, creating a new currency isn't one.

[Enzius 485]

Go away Rothschild

[Jarosz 189]

Wurm Currency and the economy has stood up for like 8 years of game that included the wipe of entire servers... It should be able to handle the price change.

There would be better ways to deal with it, creating a new currency isn't one.

actually, removing the need to buy currency would be a viable way of increasing the economy of wurm.  HOWEVER...

 

You'd have to get rid of the in game premium option, other wise that option would cause the reverse effect, inflation.

[ReaverKane 363]

actually, removing the need to buy currency would be a viable way of increasing the economy of wurm.  HOWEVER...

 

You'd have to get rid of the in game premium option, other wise that option would cause the reverse effect, inflation.

Maybe, but then would remove a big part of how wurm is funded.

[Sobotnik 365]

Wurm Currency and the economy has stood up for like 8 years of game that included the wipe of entire servers... It should be able to handle the price change.

There would be better ways to deal with it, creating a new currency isn't one.

No economy has ever survived 60% deflation rates. Remember the changes were recent, but in a few months at this rate I can predict the wurm economy hemorrhaging a lot of gold.

 

It survived those 8 years because it was stable and gradually inflating (since it was tied to the euro). 

[Sobotnik 365]

actually, removing the need to buy currency would be a viable way of increasing the economy of wurm.  HOWEVER...

 

You'd have to get rid of the in game premium option, other wise that option would cause the reverse effect, inflation.

Inflation isn't bad, as long as it's low (1, 2, 3, maybe even 4%).

 

 

Maybe, but then would remove a big part of how wurm is funded.

 

Which is why a separate one might be a good idea.

 

Alternatively, inflating the wurm currency would incentivize more people to buy silver and premium time. If it inflated enough and was stable, you would get a lot of players buying silver and premium time because it was cheap and known to be doing well ingame.

 

As it stands now, nobody is going to buy silver or premium time as much, and people are going to have to work harder ingame for the same money. A lot of deeds are going to disband, and many traders will report less money.

 

Go away Rothschild

 

Why? What's wrong?

Edited May 6, 2013 by Sobotnik

[Enzius 485]

Inflation isn't bad, as long as it's low (1, 2, 3, maybe even 4%).

Bernake, pls. Ruin someone else's economy.

Edited May 6, 2013 by Enzius

[Hula_Girl 266]

One of the problems would be: how would the newly-printed money enter the system? Rolf prints 1000 wurmesos, and what then? He buys something from someone (from whom?)? Traders give wurmesos instead of silver?

[whereami 564]

As it stands right now, the deflation is going to take most control over the economy out of the game developers hands and it's going to enter a deflation spiral.

I see a few problems here;

1. Wurm's economy has always been controlled by the players, not the devs. All silver does is give people an easy way to convert real world currency into something they can use in-game. I think rather than creating a completely new currency, people would rather just trade in euros as some do now, or barter for goods and services.

2. How can you be so sure of all this? I'm no financial/economical knowitall myself, but surely you cannot know all this for fact. The value of silver will decrease, sure. But I personally am making and buying more things now than ever. Expensive shineys too . For those of you saying that its because it was tied to the Euro, well it still is! Its just at a 1.6:1 ratio rather than 1:1. Sure it will take some adjusting to, but surely its not going to spell then end of Wurm. Come on.

Edited May 6, 2013 by whereami

[Sobotnik 365]

Bernake, pls. Ruin someone else's economy.

How would it ruin it?

 

One of the problems would be: how would the newly-printed money enter the system? Rolf prints 1000 wurmesos, and what then? He buys something from someone (from whom?)? Traders give wurmesos instead of silver?

Normally in the real world, banks would lend out this new money.

 

Doing it with traders might be a good idea. At least if players hoard it, they would be forced to eventually spend it, and since it cannot be destroyed (barring sky high inflation rates) then locking up traders would be a defeatist strategy in the long run because your money would become worth less over time. (destroying it as in, deeds taking in the money. This wouldn't happen).

 

 

I see a few problems here;

1. Wurm's economy has always been controlled by the players, not the devs. All silver does is give people an easy way to convert real world currency into something they can use in-game. I think rather than creating a completely new currency, people would rather just trade in euros as some do now, or barter for goods and services.

2. How can you be so sure of all this? I'm no financial/economical knowitall myself, but surely you cannot know all this for fact. The value of silver will decrease, sure. But I personally am making and buying more things now than ever. Expensive shineys too  .

 

1. The devs control the creation of new money to a large degree. Since they recently increased the price of silver, it's having a deflationary effect.

 

2. This is a long term trend. Remember that a lot of people bought silver just before the price change due to anticipating it. Once the next deed taxes come about, that is when the shock will start to truly kick in.

Edited May 6, 2013 by Sobotnik

[alaskanbob 225]

No thank you.

[Sobotnik 365]

No thank you.

Why?

[whereami 564]

The devs control the creation of new money to a large degree. Since they recently increased the price of silver, it's having a deflationary effect.

No, because Traders. That is all that needs to be said. Though there are many other ways to gain large amounts of money without ever spending a RL dime.

True that a lot of people bought what they could before the increase. It definitely has not reached its full effect yet, likely wont for a year or more.

[Klaa 4,872]

Printing more money... yeah like that one has worked well in recorded history.

[Sobotnik 365]

No, because Traders. That is all that needs to be said. Though there are many other ways to gain large amounts of money without ever spending a RL dime.

True that a lot of people bought what they could before the increase. It definitely has not reached its full effect yet, likely wont for a year or more.

 

Traders are dependent on deed taxes. That is starting to drop now that silver costs more to buy.

Printing more money... yeah like that one has worked well in recorded history.

It actually does.

 

Inflation is good.

Edited May 6, 2013 by Sobotnik

[Kadore 926]

Let's import goods from Exodus made with noob slave labor, to compete with the genuine Independence union made goods.

[Klaa 4,872]

Traders are dependent on deed taxes. That is starting to drop now that silver costs more to buy.

It actually does.

 

Inflation is good.

Only in the short term. Longterm wise it ruins economies and creates a self-perpetuating problem. Ive watched mass inflation from gold farmers ruin more than one game economy.

[Sobotnik 365]

Only in the short term. Longterm wise it ruins economies and creates a self-perpetuating problem. Ive watched mass inflation from gold farmers ruin more than one game economy.

 

That's only when inflation rates are too high.

 

Low rates of inflation, coupled with steady growth, is a good thing.

 

In those other games, money could be literally created by anyone.

 

In my example, only the developers could create money when needed.

[Klaa 4,872]

Sure except steady growth is almost impossible to maintain longterm, whereas steady inflation drives itself upward, never down.

EDIT: Im very much a fiscal Libertarian when it comes to economics and debt.

Edited May 6, 2013 by Klaa

[Sobotnik 365]

Sure except steady growth is almost impossible to maintain longterm, whereas steady inflation drives itself upward, never down.

 

Which is why if the game developers are the only ones with the power to create currency, they can control how much money needs to be pumped into the economy.

 

As it stands now, far too little money is being pumped into it.

 

 

Also what do you mean by fiscal libertarian? This has nothing to do with fiscal policies.

Edited May 6, 2013 by Sobotnik

[darthryan 588]

Which is why if the game developers are the only ones with the power to create currency, they can control how much money needs to be pumped into the economy.

 

As it stands now, far too little money is being pumped into it.

Where are you getting your information?

[Jberg 3,070]

Here, have some reading.

 

http://jenn001.game.wurmonline.com/mrtg/economy