Guild Wars 2

Friends, Family, people I really don’t know, I would like to bring a matter to your attention. I would like to be nit-picky and talk about the value of gold in Guild Wars 2.

Now, when we think of gold, we all think of that little yellow circle of currency we all desire to have plenty of. Some of us on the other hand, may also think of things such as gold ore and/or ingots. The problem with this, is that we have a bar of gold, which has much more refined gold, than the actual gold coin with a market value of 1g. Currently, gold ingots are selling for 58 copper on the marketplace. This brings me much fear for the market of this game. Sure, many would say that it’s all in the markings of the coin, a piece of metal isn’t a penny unless it’s minted as such. That may be true, but counterfeiting would be a very feasible skill with the kind of technology available, and there have been no counterfeiting measures shown within the game. For all we know, the kitten coins could even be blank. For the sake of the argument however, let us assume that they’re minted coins. It would be a simple matter of taking these coins, making a clay imprint, and ultimately creating a casting to which gold bars could be smelted down into coins, causing havoc and chaos within the economy. Think about it. One gold is 10,000 copper. At 58 copper per ingot, that’s a little less than 178 fresh gold ingots that you can smelt down into an amount of gold we can only guess at, not knowing the exact measurements and purity of each.

The matter at hand troubles me greatly, ANet. It’ll be like Nazi Germany’s inflation all over again, except with sacks of gold in place of bundles of paper money. Somebody will go to buy a basic salvage kit to find that the price has raised another 30 gold within the few minutes that they were busy. People complain about market listings as it is, but this inflation problem would put even the Black Lion trading Co. out of business, and power in a world where currency no longer holds any value. Gold is only the worst part of the problem at that. We still have natural silver and copper nodes out there that can go through the same process.

So what do you say, ANet, would you care to explain how we would fix this dire situation? The ball is in your court.

okay. solution stands at diverting a large chunk of you portfolio to items that will rise in price with your “inflation”

Fiat currencies are all backed upon the central bank’s guarantee, but unfortunately their guarantee may be no good. In essence, you are trusting that the central banking authority will preserve the value of the money by not recklessly tossing it about/generating huge quantities out of thin air. Generating huge quantities in our virtual world is about missions, drop rates of gold/silver/copper, and all taxes and sinks that remove currency from the game.

In the U.S. the central bank releases information regarding its targets, for both growth and inflation, unlike the UK and Europe who only targets inflation rates, not that they’re any good at it either.

Since we live in a customer service state, no such information has been “granted” to us by our “benevolent” rulers and we will not know such information until they do.

So in the end, we have to put all of our trust into them. I just find it a problem that such a loophole exists in the system. Investing now in goods that would be prime items later on should we go back to a bartering system would be a great idea considering the circumstances. Even if we have drop rates, we still have players and even some shady looking npc’s that I think would be willing to smelt down some cold bars and cast them into gold coins. Because of how money magically disappears though, this could also potentially cause gold to be as costly ad gold coins, depending on the amounts defined in each. Until then, it’s back to counting pixels to define the measurements I suppose.

Ok… so I’m assuming this is just a philosophical discussion here, and that you don’t really believe any of this, because it is a little ridiculous.

Having said that, and playing along; We don’t the dimensions of either our gold coins or the gold clusters/ingots. For all we know it could literally take 137 ingots to make 1 gold coin. However there is no centralized government, there is no central printing press, no regulatory authority; so it already is a barter system. A charr gold coin probably wouldn’t look like an asuran gold coin. And either way we are assuming that isn’t just a gold plated coin. Perhaps it is an orichalcum blank plated with gold.

You’re right, as this is philosophical discussion. We are assuming that the coins are solid gold, as I doubt from the looks that there is a system to plate or cast gold onto things aside from dipping a coin in molten gold and then pressing it. The most centralized government would have to be in LA if you could call it that. I see each civilization as their own country, and LA as sort of a hub when all of them are put together. As said before, we really don’t now the dimensions of either, nor do we the purity. The difference between a barter system is that there is a centralized currency, and aside from special cases where items could be used as a form of currency (1k karka shells for the ancient karka shell earring for example), we’re not trading off hairy spider legs or ectos for other goods, unless those hairy spider legs or ectos happened to be a form of official currency. If we take into a more literal account that ANet is like an omnipotent god of the land and that they control the central money system and implying that gold disappears, then many of the factors are taken out of consideration. For example, if I were to purchase an item form an NPC, you could say that the money is moving, and is still in play whereas in reality, the money is gone. it magically vanishes. Alas, I digress. The fact of the matter is that all “countries” take the same kind of gold, silver, and copper coinage and that there is no difference between a gold that I obtain in the Black Citadel than I do in Hoelbrak.

That’s why I invested all my cash in mithril coins.

There’s plenty of actual coin currency in the world where the materials to make the coin have more value than the coin itself.

So either the process to extract the raw materials from the coins costs too much or it is far too tedious for a small profit.

The reverse can be argued with Tyrian currency. It’s pretty much definite that the coins are indeed coins, probably with some engravings to go with them. Make the engravings detailed enough and you’re effectively in a position where counterfeiting costs too much to be a problem.

With that being said Olba, remember that it’s possible to cast the same details into the counterfeit when smelting the coins down. Unless there was some sort of special fail-safe, it’s hard to exactly protect your money. The US dollar for example, has many. One of the most commonly known is the thin metal strip within the middle of the bill. Because of the complex process that is used to weave the metal strip into the bill, many would be counterfeiters are either deterred, or are caught because of it. Without the aforementioned unified government, and each “country” having it’s own casting system of their unified currency (if any), this could mean that many different types of coins come with different fail-saves. Though, I highly doubt that such kinds of techniques to protect the regular coinage in Guild Wars 2. With that being said, even if the casting were as complex process, we still have people in the US who counterfeit the dollar bill to major degrees, going to great lengths to perfect every aspect to ensure they evade detection. Even though the US dollar is one of the more secure bills today, that doesn’t stop many. Some of whom I might add, have been very successful.

“ingot” does not have any size associated with it. neither does “coin”.
If you sat down and mined gold ore for 5 seconds, how much do you think you’d get?
Anyways, it’s entirely possible to have 1g gold ingot (size of a drop of water) and 200g gold coins (size of a small coaster)

Mystic.5934:

If you sat down and mined gold ore for 5 seconds, how much do you think you’d get?

If my mining consisted of floating underwater and extending my arm at this ore while holding the pick axe in my other hand, I doubt I would get much at all.

It costs 2 cents to create a penny, worth 1 cent.

Which world is crazy now?!

Please tell me this is a troll? You are saying there are users turning ‘gold ore’ and ‘gold bars’ into actual currency? They’re crafting ingredients.

Olba.5376:

Mystic.5934:

If you sat down and mined gold ore for 5 seconds, how much do you think you’d get?

If my mining consisted of floating underwater and extending my arm at this ore while holding the pick axe in my other hand, I doubt I would get much at all.

I’m reading a book where this is possible – but only to magic users, and it makes them very tired afterwards.

Mystic.5934:

“ingot” does not have any size associated with it. neither does “coin”.
If you sat down and mined gold ore for 5 seconds, how much do you think you’d get?
Anyways, it’s entirely possible to have 1g gold ingot (size of a drop of water) and 200g gold coins (size of a small coaster)

If you want to talk about the metaphysics of space consumption in Guild Wars 2, then let’s go. You are able to carry up to eight 20 slot bags. If you want to argue that the runes of holding in the created backpacks apply as magical, then let’s try the 20 slot starter bag. This bag here can hold things like Charrzookas. That exotic rifle is larger than some Norn players. Better yet, we need enough ingots to create things like weapons and equipment. If we use the term Ingot as a standard size for a bar of metal, then it’s hard to make things like sword hilts and blades out of tiny ingots. In a way, my whole beginning post is a sort of way to look at the small things in the game, and wonder how something like that could of slipped through without any thought, if there wasn’t one. We all know that in the game, there isn’t a way to process gold ingots into gold. But the thought that we have these small gold coins worth 1g, and these ingots of gold worth less than a silver, it’s funny to wonder how this really works out without some definite and logical answers.

Fiat money systems are bad, guild wars needs a better system

An interesting discussion, if you were to implement real world mechanics, but this kind of issue is omnipresent in MMORPGs.

Taken literally, you’d have a lot of trouble explaining a whole host of recipes, and why you can’t just make X out of Y. In a universe that is steeped in magic anyway, it’s not far-fetched to use mystical reasoning as a general cover-all to rationalize the way things work, if that helps your immersion.

Our currency is magic gold, silver, and copper. You can’t make it from ordinary metals.

You are forgetting that gold itself does not have an unlimited supply, and that you will therefore hit a limit to how huge your inflation can get. Gold doesn’t grow on trees, you know (it grows out of the ground, as we are all aware). And at some point the amount of gold that we can mine becomes insufficient to keep up with the demand and inflation will fall. But seriously, you are expecting that we will reach a point where ANet will start sending out “trillion copper” coins? ROFL. GW2 is a serious game and would never allow silly things like that to happen.

well, too little supply would cause prices to rise.

Nobody here has any idea of the monetary policy, courtesy of John Smith. Nor do we know anything about the inflationary conditions of the economy, unless someone wants to make their own truly representative price index and share it with us.

Even if we introduced a financial sector to this game in which players could deposit raw materials at a bank in exchange for deposit notes (money), and assuming that all banks had a standard note, the value of the note would be subject to drop rates of the materials that are controlled by Anet.

I do, however, think that a financial sector is direly needed for this game, seeing that there are so many people with large sums of money. This is a problem that I see in many online games.

Gold Standard was a horrible mechanism…

I feel flattered that this simple thread actually caught attention as an argument. As there is now discussion of real monetary value, I think this calls for some discussion on how a real monetary system works AKA, An explanation of fiat money. If my memory serves me, the standard for money is gold. What controls inflation and deflation is two things. The amount of gold a country has in it’s reserve, and the amount of liable printed and minted currency is out. When we have a dollar, it’s like a promise from the government that we are liable for one dollar’s worth of gold, an amount that changes depending on the economics and economy. In reality, deflation of the economy means that our money is worth more gold promise wise, while inflation means that each piece of coinage that we own is worth a less amount of gold, even if it is still say an ounce. There really is no baseline for money other than actual gold. It’s one of the reasons why it’s a good idea to invest in gold when the economy is going sour and into a situation such as a repression. It’s also another reason why people who normally invest in gold and hold onto it profit. The economic circumstances allowed them to trade their gold off to a buyer for say, 10 ounces worth of gold in money.

As for the idea of a financial sector, I would like to put in that as noted before, drop rates are indeed controlled by Anet. Though I’m sure it would cause a great force to move a heavy hand, but having such control is dangerous when a new economic mechanic such as that one is implemented. I think it’s fine enough having two, three if you count Gems, forms of currency and Karma acts as a sort of selective currency that gets you the things that money cannot sometimes buy.

So now the discussion comes to this. A fiat money system would mean that there has to be some sort of unified governmental or baking system that backs the monetary value of gold coins with something of value. It isn’t platinum because that’s definitely no more rarer than gold in this universe. Even with the fiat system in place, there’s still counterfeiters in the world today. As I said before, it would really call for some security measures on the coinage, which would require some sort of unifying banking/governmental force to ensure that the currency between all “countries” is counted as either legal tender, or coinage of value. I would promote the idea of a currency exchange sort of situation, but we don’t see anything of the like around, and everybody seems just fine with gold, silver, and copper coins.

I’m fairly certain that our fiat curreny is not backed by gold, as per 1971 abolishment of the gold standard.

@ zavulon – why? because it allowed USD to have a real value? look at how much the dollar devalued since 71? since 1990 even?. Right now, our Fed, the guaranteer of our money, is making the same mistakes that it made during the 08 crash. Just look at interest rates. 0% are you kidding me, for five+ years!? It’s been declared indefinite! imagine if our government, once its debt increases to 18-20 trillion and if interest rates were allowed to rise to where they would naturally be, had to start paying 4% interest on all of that? That’s 35% of our entire tax revenue out the window.
Instead of taking our medicine now and allowing the market to correct itself, we are padding it up with stimulus and QE and just allowing the problem to fester.

just look at the price of gold over the past 12 years and you’ll see where the real value is.

I like you, Leno. From what I’ve seen you’re always straight to the point, and logical about it. The saddest thing in my book was how the former debt ceiling problem was “solved”. It was raised, and then vacation was had for all.

Poor Leno.3582:

I’m fairly certain that our fiat curreny is not backed by gold, as per 1971 abolishment of the gold standard.

@ zavulon – why? because it allowed USD to have a real value? look at how much the dollar devalued since 71? since 1990 even?. Right now, our Fed, the guaranteer of our money, is making the same mistakes that it made during the 08 crash. Just look at interest rates. 0% are you kidding me, for five+ years!? It’s been declared indefinite! imagine if our government, once its debt increases to 18-20 trillion and if interest rates were allowed to rise to where they would naturally be, had to start paying 4% interest on all of that? That’s 35% of our entire tax revenue out the window.
Instead of taking our medicine now and allowing the market to correct itself, we are padding it up with stimulus and QE and just allowing the problem to fester.

just look at the price of gold over the past 12 years and you’ll see where the real value is.

The Gold Standard was worse in the Great Depression than the Fiat system was in the recession. In fact anyone who has studied the monetary system understands this…

Hell, Milton Friedman (the great economists and later laissez-faire enthusiast) said it was not a practical system anymore…

And LOL @ the debt argument…

The majority of it is private debt….

My Norn guardian firmly believes that the gold standard is not an appropriate choice for the current economy, we should instead move immediately to adopt the ale standard instead.

Astraea.6075:

My Norn guardian firmly believes that the gold standard is not an appropriate choice for the current economy, we should instead move immediately to adopt the ale standard instead.

I think my Norn guardian would agree too, though I think that all Norn would end up in debt and with nothing but a belly full of ale.

Bearcats.2340:

Astraea.6075:

My Norn guardian firmly believes that the gold standard is not an appropriate choice for the current economy, we should instead move immediately to adopt the ale standard instead.

I think my Norn guardian would agree too, though I think that all Norn would end up in debt and with nothing but a belly full of ale.

True, but the effect of such a massive ale-sink (also known as a moot) would reverse the rampant inflation currently ravaging the economy.

It could possibly make everyone drunk enough to forget about it at least.

1/ gold standard is an extremely bad system because gold inherently has no value beyond jewelry. Only 12% of all gold is used in industrial appliances. Compared to copper and iron (90+%) that’s virtually nothing. As such, gold, in and of itself, is as much fiat in value as paper money.

2/ the cost of gold comes only from people trading gold because they trade gold. If you don’t like power traders in GW2, you most likely shouldn’t like a gold standard. It is very easy to see how such a market can instantly crash 90% and never recover once people lose faith in this worthless shiny metal. At least facebook shares had a source of revenue behind them which gave it a real lower limit.

3/ gold standards actually create and prolong depressions. Gold standard limits the economic output of a country. Currently the US economy has a value that’s about 3 times the entire world gold supply at current prices. It is impossible to go back to the gold standard without destroying at least 2/3rd of the US economy.

4/ People tend to forget that a very small amount of inflation, say 2% a year, is actually good for an economy! It stimulates investment and growth, creates jobs and insures that people can actually buy a house which is the best pension investment possible. Controlling this inflation is the best way to control economic output and stimulate growth. A gold standard destroys all of that while bringing virtually no positives to the table.

All that being said… the only good reason to have a gold standard, is to stimulate a young economy with growth pains. Any country that recently became independant does not have trust from the markets. As such, a gold standard for a decade or two would mean a base level of growth can be insured until the limits of the gold standard are reached. By that time, trust from investors should be enough to stimulate further growth.

TL’;DR: no economy can grow more than the total value of it’s gold reserve under a gold standard. Any country will hit that limit within half a decade given world gold supply.

Poor Leno.3582:

I’m fairly certain that our fiat curreny is not backed by gold, as per 1971 abolishment of the gold standard.

@ zavulon – why? because it allowed USD to have a real value? look at how much the dollar devalued since 71? since 1990 even?. Right now, our Fed, the guaranteer of our money, is making the same mistakes that it made during the 08 crash. Just look at interest rates. 0% are you kidding me, for five+ years!? It’s been declared indefinite! imagine if our government, once its debt increases to 18-20 trillion and if interest rates were allowed to rise to where they would naturally be, had to start paying 4% interest on all of that? That’s 35% of our entire tax revenue out the window.
Instead of taking our medicine now and allowing the market to correct itself, we are padding it up with stimulus and QE and just allowing the problem to fester.

just look at the price of gold over the past 12 years and you’ll see where the real value is.

I’m pretty sure the dollar devalued due to being dependant on oil prices, as you stated they got rid of the gold standard in 1971.

The point of this post was largely to highlight the absurdity of how gold, the currency, is valued against gold, the commodity.

It seems to have gone over most people’s heads.

TheKillerAngel.3596:

The point of this post was largely to highlight the absurdity of how gold, the currency, is valued against gold, the commodity.

It seems to have gone over most people’s heads.

Are you saying that you actually read my post and thought about why I would of posted it? You pretty much hit the nail on the head, though I don’t mind the economic and philosophical talk about logistics, in and out of the game. That main reason you stated is pretty much why it’s in this forum and not in General.

TheKillerAngel.3596:

The point of this post was largely to highlight the absurdity of how gold, the currency, is valued against gold, the commodity.

It seems to have gone over most people’s heads.

Actually, I think people are having as enjoyable a discussion as you can have about the topic.

There’s only so much you can draw from the absurdity alone, which, of course it is strange if you assume our gold pieces are literally just pieces of gold.

Everything in a fantasy game is “absurd” though, meaning that highlighting one funny circumstance is kind of lost in a swarm of "absurd"concepts, like how you can carry around stacks of snowflakes in a jungle without them melting, or fit 200 rifles the size of my body into a few packs i’m carrying.

This discussion was destined to get off point, but has been civil and somewhat relevant. What more can you ask for?

LFk.1408:

TheKillerAngel.3596:

The point of this post was largely to highlight the absurdity of how gold, the currency, is valued against gold, the commodity.

It seems to have gone over most people’s heads.

Actually, I think people are having as enjoyable a discussion as you can have about the topic.

There’s only so much you can draw from the absurdity alone, which, of course it is strange if you assume our gold pieces are literally just pieces of gold.

Everything in a fantasy game is “absurd” though, meaning that highlighting one funny circumstance is kind of lost in a swarm of "absurd"concepts, like how you can carry around stacks of snowflakes in a jungle without them melting, or fit 200 rifles the size of my body into a few packs i’m carrying.

This discussion was destined to get off point, but has been civil and somewhat relevant. What more can you ask for?

That’s true. It’s a matter of suspension of disbelief, largely. We accept bottomless bags as an element in fantasy games, but I find the discrepancy in how gold is valued to be a bit harder to accept. Pure gold should come about through a much more rigorous refining process and should be far rarer than it is in game.

Different purities of gold would add new mechanics, for better or for worse. It would depend how it was implemented into the game.

TheKillerAngel.3596:

The point of this post was largely to highlight the absurdity of how gold, the currency, is valued against gold, the commodity.

It seems to have gone over most people’s heads.

http://en.wikipedia.org/wiki/Seigniorage

A gold coin could be made from anything, irrelevant whether it’s gold, messing or yellow plastic. There a difference between the name “gold coin” and the name of the material it’s made of, in this case “pixels”.

Even in real life, most gold coins weren’t actually pure gold coins. Gold is soft and easily wears if used for daily transactions. As such, almost every coin was alloyed with copper or silver. Anything over 18 carats gold, or 75% pure, is not suited for coinage.

In the end, you have to trust the government, regardless of whether coins are made of gold or cotton. A corrupt government will sell you a 10 carat coin and tell you it’s gold, while a functional government will give you a piece of paper and tell you it’s worth 100 dollars.