Guild Wars 2

After months of slowly losing value versus gems, gold has taken an alarming dip.

Please comment on the recent instability in the economy. Gold generation via game rewards has really taken off but is it healthy for the economy? Because the game money cannot be loaned, increased money supply translates into inflation. My own opinion is to trim gold rewards while leaving the increased consumable and salvagable material drops as they are in Scarlett hunt events. The lack of farming due to continuous event releases had tightened the market for many craft materials but the higher event rewards seems to have prevented price drops on crafting consumables while significantly changed the gem exhange rate.

Personally, I have no issues with a change in the gem exhange rate but am more concerned with the rate of change. Please consider my request for more monetary stability.

There was a post a few weeks ago, very “Baghdad” Bobish from a staffer saying that inflation wasnt going on. Well, it looks like it is and it looks like it has flipped several main markets in the game upside down. Mid July was a major hit followed by later on in this month.

The farming has gotten a little over the top. What are we on now, about a month straight of farming events? We had the arena in DR and now the random ones out in the world? People are collecting a LOT more money that usual and it is effecting the economy.

John Smith from Anet said “…in the last week, the median player earned less than 3 gold in the new content (that’s discounting all players who earned less than 1 gold).”

But what does that mean? A lot of players don’t make 3 gold in weeks of normal game play. This could be a huge increase percentage wise for median player wealth, which is going to lower then value of money as demand for items will rise due to extra cash in the system that was earned with low effort.

people are going to spend easy cash recklessly as opposed to cash that took more effort to earn.

I wish we could hear more about this from John. I do have some concerns that the game is getting bloated. The gem price and cost of mini’s (original) right now is wild.

https://forum-en.gw2archive.eu/forum/game/bltc/Economy-concerns/page/2

Dench.5968:

There was a post a few weeks ago, very “Baghdad” Bobish from a staffer saying that inflation wasnt going on. Well, it looks like it is and it looks like it has flipped several main markets in the game upside down. Mid July was a major hit followed by later on in this month.

The farming has gotten a little over the top. What are we on now, about a month straight of farming events? We had the arena in DR and now the random ones out in the world? People are collecting a LOT more money that usual and it is effecting the economy.

John Smith from Anet said “…in the last week, the median player earned less than 3 gold in the new content (that’s discounting all players who earned less than 1 gold).”

But what does that mean? A lot of players don’t make 3 gold in weeks of normal game play. This could be a huge increase percentage wise for median player wealth, which is going to lower then value of money as demand for items will rise due to extra cash in the system that was earned with low effort.

people are going to spend easy cash recklessly as opposed to cash that took more effort to earn.

I wish we could hear more about this from John. I do have some concerns that the game is getting bloated. The gem price and cost of mini’s (original) right now is wild.

https://forum-en.gw2archive.eu/forum/game/bltc/Economy-concerns/page/2

They already nerfed the gauntlet which is the sole culprit for inflation. Farming in general doesn’t harm the economy. You need to look at what players are specifically farming.

Farming gold drops = leads to inflation
Farming items = disinflation or even deflation

^Actually, the Silver in every Champ Box adds up faster than Gauntlet farm. Most people can’t Gauntlet, but everyone can follow a Queensdale zerg…

Dench.5968:

There was a post a few weeks ago, very “Baghdad” Bobish from a staffer saying that inflation wasnt going on.

What are you talking about?
… Smith’s got a 1 word “Yes” post where he specifically admitted that they had too much of an open valve on currency flow… (Which is just as likely to be all but negated by the Ascended Weapon cash sink that’s about to hit in a few days). Yeah his “Median” values were a bunch of weasel words, I don’t think anyone honestly bought that dataset, but the actual influx was definitely not being denied…

Disclaimer: And I rarely ever go out of my way to defend any of these devs… so don’t lump me in with the fanboys thanks

If you farm invasions and are good in tagging you can add about 7g to 10g (depending on the lvl of the invasion) to the economy every 45min. Multiply that by the amount of people who play invasions.

I would wager the gold influx from the invasions is worse than gauntlet

Just look at the inflation growth from both periods (note you shouldn’t include this week since the rise in price is from speculation and not inflation)

Even though it’s one commodity (and inflation is calculated from indexes), glob is a highly tradeable commodity to look at. Roughly during the gauntlet patch, ectos rose 18s to 24s. After that and before Tuesday it fluctuated from 22-24s. Pretty flat. If gold faucets were worse with these invasions it would have kept going up.

Ectos right now are 29s, but again, that’s from speculators.

I wouldn’t put it past you guys to introduce several gold sinks in the next few releases to handle inflation

i.e.
- materials from vendors for 500 crafting
- new cultural armors and weapons

create demand, create value, create more demand, stifle happiness, next game.

Vol.5241:

I wouldn’t put it past you guys to introduce several gold sinks in the next few releases to handle inflation

i.e.
- materials from vendors for 500 crafting
- new cultural armors and weapons

Also: with the upcoming changes to magic find, I bet there will be a lot less gold coming into the game from the ‘merching’ of blues and greens.

Manasa Devi.7958:

Vol.5241:

I wouldn’t put it past you guys to introduce several gold sinks in the next few releases to handle inflation

i.e.
- materials from vendors for 500 crafting
- new cultural armors and weapons

Also: with the upcoming changes to magic find, I bet there will be a lot less gold coming into the game from the ‘merching’ of blues and greens.

Yep, thats like 60c for blues or <2s per green.

I must wonder though how the market will react to the MF change – how much will players pay for a blue or green? And if the TP fee > the npc vendor then, awesome for the economy.

Vol.5241:

Yep, thats like 60c for blues or <2s per green.

I must wonder though how the market will react to the MF change – how much will players pay for a blue or green? And if the TP fee > the npc vendor then, awesome for the economy.

Well – I got my bags full of blue’s and green’s after a little session – not sure if they will sell for too much. But it will mean me not selling them to the vendor.

Edit: Do they sell right now to mystic forge them into rares?

Rouven.7409:

Vol.5241:

Yep, thats like 60c for blues or <2s per green.

I must wonder though how the market will react to the MF change – how much will players pay for a blue or green? And if the TP fee > the npc vendor then, awesome for the economy.

Well – I got my bags full of blue’s and green’s after a little session – not sure if they will sell for too much. But it will mean me not selling them to the vendor.

Edit: Do they sell right now to mystic forge them into rares?

What I personally would do is sell all your blues/greens that are currently occupy space in your bags/bank.

And then start farming invasions like hell and collecting stacks of champion boxes.

After the patch, open them all and sell the blues/greens on TP if it’s profitable to do so. You can hold hundreds of blues/green through no more than 10 stacks.

That is actually a good idea! Thanks
Another successful day on the forum.

Vol.5241:

And then start farming invasions like hell and collecting stacks of champion boxes.

So in order words, corner the market on account bound Exotic Champ boxes?

I really worry that those of us who didn’t farm the last two events heavily and didn’t earn a mass of gold will be left high and dry if they put something in place to counter the mass amount of gold that was farmed.

Reports of people farming 10+ gold per invasion while I barely get 2-4 gold per invasion have me a little worried. Reports of people farming 100s of gold over the last two events has me worried that a big sink will be coming and those who didn’t mindlessly farm will be left way behind.

Mad Rasputin.7809:

I really worry that those of us who didn’t farm the last two events heavily and didn’t earn a mass of gold will be left high and dry if they put something in place to counter the mass amount of gold that was farmed.

This. While I have made a lot of gold farming the Pavilion and invasions it’s nowhere near what Deadeye farmers got. A gold sink affects everyone (especially if it’s crafting), not just farmers.

Vol.5241:

What I personally would do is sell all your blues/greens that are currently occupy space in your bags/bank.

And then start farming invasions like hell and collecting stacks of champion boxes.

After the patch, open them all and sell the blues/greens on TP if it’s profitable to do so. You can hold hundreds of blues/green through no more than 10 stacks.

Careful now… let’s not forget that changing loot tables from containers already has precedent…..

LIVING WORLD
Watchwork boxes awarded from the Queen’s Gauntlet no longer contain coins.

I think the salvaging of blues and greens is a really good idea and I hope Anet never decides to implement new massieve gold sinks to counter mistakes they made wich caused people to fam loads of money.

The reason is very simple, I and I’m sure many others dont like farming much and on top of that there’s ppl who have to miss events. All of these ppl will still suffer from the gold sinks unless you can think of a magical gold sink that only effects those that overfarmed a specific event

Mad Rasputin.7809:

I really worry that those of us who didn’t farm the last two events heavily and didn’t earn a mass of gold will be left high and dry if they put something in place to counter the mass amount of gold that was farmed.

Reports of people farming 10+ gold per invasion while I barely get 2-4 gold per invasion have me a little worried. Reports of people farming 100s of gold over the last two events has me worried that a big sink will be coming and those who didn’t mindlessly farm will be left way behind.

Two numbers that guys like to exaggerate: the size of his… ego, and how much money he makes. Cut each number by at least 1/3.

People wanted to farm, Anet gave them an acceptable way to farm, and they knew that a lot of people would farm. There were already plans in place to keep things under control.

ilr.9675:

What are you talking about?
… Smith’s got a 1 word “Yes” post where he specifically admitted that they had too much of an open valve on currency flow..

I quoted the quote I was talking about. I was not talking about the one worded post.

John Smith.4610:

Overall yes we know there’s a change in short run income for players, though it’s not as severe as speculated. No, we aren’t surprised. Yes, there are plans in place to make sure the economy doesn’t experience permanent, hyper-inflation.

As far as the median numbers go, remember that how much information I can give out on the forums is often very limited. I do my best to give you a picture that you can work with. I described exactly how to take the one number I gave out and create an accurate model of what’s happening. The uncertainty in your model is unfortunately unavoidable (but can be minimized) as I can’t always post the full picture of everything that’s happening.

Thanks a bunch for the reply.

John Smith.4610:

Overall yes we know there’s a change in short run income for players, though it’s not as severe as speculated. No, we aren’t surprised. Yes, there are plans in place to make sure the economy doesn’t experience permanent, hyper-inflation.

As far as the median numbers go, remember that how much information I can give out on the forums is often very limited. I do my best to give you a picture that you can work with. I described exactly how to take the one number I gave out and create an accurate model of what’s happening. The uncertainty in your model is unfortunately unavoidable (but can be minimized) as I can’t always post the full picture of everything that’s happening.

I certainly do hope there is WAY more behind than you are allowed to say/post.
Mainly due to really simple observations:
- Invasion is one, every hour
- One main world and at least one Overflow gets filled with players during invasion
- I “earn” around 4-6g (vendored greens, blues +gold from containers) per Invasion

So, if total amount of players per map is (wild guess, i have no clue about real number) 150 and everyone earns 4-6g just like mem then we get 600-900g generated per hour. And that’s just from one world.
Again, this is with my guessed amount of players per map, the amount of gold generated per hour is mainly dependant on main world and overflow capacity, which i do not know.

I’ve joined up somewhat over 2 months ago, and the GoldToGem ratio was around 2g60s to 2g90s. Now it’s closing in to double that.

Edit: Again, this is only GENERATED gold aka gold out of thin air. Excluding value of crafting materials.

mohrad.8972:

Edit: Again, this is only GENERATED gold aka gold out of thin air. Excluding value of crafting materials.

Crafting materials trade hands for existing gold, and the TP fees take gold out of circulation, so the more mats drop, the more mats sell and the higher the prices go, the more gold is siphoned from the system, helping to balance new gold coming into the system.

Also, less people are running dungeons and doing meta-events – I’ve gone to Shatterer, Teq, Frozen Maw, etc. and have been completely alone or have seen only a handful of people on several occasions. Many of the people “farming” the invasions are doing so at the expense of their previous activities, and are not farming boss chests and dungeons.

A lot of the TP shenanigans are the result of people having more cash to spend but less yellows and oranges to sell. Demand for certain items is rising because of speculation about what the next few patches will bring – ascended and legendary crafting, especially drives speculation of precursor prices and hoarding crafting mats.

What JS has been trying to say, for anyone who bothers to listen, is that the sky is not falling, Anet did not double or triple the rate at which gold enters the game without considering where all that money would go, and there are and will be new things to spend that money on. There’s no reason to panic, the market is shifting, not inflating.

tolunart.2095:

What JS has been trying to say, for anyone who bothers to listen, is that the sky is not falling, Anet did not double or triple the rate at which gold enters the game without considering where all that money would go, and there are and will be new things to spend that money on. There’s no reason to panic, the market is shifting, not inflating.

This I agree with tolunart with. Simply put ANET’s addition of champ loot and the scarlet invasions don’t inject pure cash into the economy without people who have played into the champ loot and invasions being subjected to some kind of gold sink. You don’t directly get gold from the champs or the invasion, you have to merch it, or TP it to get the gold. Merching is usually a huge value sink, which destroys the item you merch in exchange for around 50-80% of the value in gold. TP is a 15% gold sink with no destruction of items. While deadeye was ridiculous – it wasn’t so much so that things started inflating just because people had the money. Supply is drying up because we ARNT doing many world events, and we are only hitting champions related to the scarlet invasion – this in itself drive up the demand and cost of the items. The select few who were deadeye farming are not looking to crash the economy, instead they are looking to get enough gold to buy what they want, when they want it.

Stop being overly dramatic about temporary gold sources when we’ve had CoF easy mode 5 gold an hour for several months. At least now content updates are geared with materials and some cash.

tolunart.2095:

Also, less people are running dungeons and doing meta-events – I’ve gone to Shatterer, Teq, Frozen Maw, etc. and have been completely alone or have seen only a handful of people on several occasions. Many of the people “farming” the invasions are doing so at the expense of their previous activities, and are not farming boss chests and dungeons.

What JS has been trying to say, for anyone who bothers to listen, is that the sky is not falling, Anet did not double or triple the rate at which gold enters the game without considering where all that money would go, and there are and will be new things to spend that money on. There’s no reason to panic, the market is shifting, not inflating.

Players have left dungeons and meta event in favor of invasions b/c the invasion farming offers better guaranteed returns for time spent. The questionable reassignment of gold rewards for dungeons serve to provide evidence of mismanaged reward allocation.

I stopped bothering to listen to him a while back as there is nothing of worth to gather from the words he is permitted to say to us. Kinda like the words of a fortune being meaningless as they are so generalized that they may apply to anything.

Most of the items players spend gold on are items they could get themselves but would rather purchase to save time. In the context of a game where both “items” and “gold” spawn from and despawn into nothing, the notion of “inflation” is somewhat misguided.

In the real world, currency came into play as a form of IOU when commerce revolved around bartering. This means that instead of trading you a goat for a bag of grain, I would give you an IOU (the generally accepted currency) that puts me in debt to you for the value of a goat. You could then keep that IOU and come back to me later, then give it to me and get the goat I owe you OR you could give that IOU to someone else and they’d know that the IOU is good for one goat from me or the goat vendor. This all works by a kind of mutual trust among the traders, who trust each other to uphold the generally accepted value of the chosen currency.

In a game, you can generate currency by selling imaginary items that always sell for the same price no matter what. When you loot a mob and collect some items, those items were generated by the game just for you and when you sell them, the currency you get does not have any value associated with it and does not represent debt (the NPC vendor does not go in debt to you because he is not giving you an IOU; the currency is generated from nothing at the point of sale). This is exactly the same for ALL players.

For this reason, it doesn’t matter how much money is floating around in the game because it’s tied to the drop rates of items in the game and is entirely arbitrary (as set by the game’s admins). The value of game currency is controlled by limiting the availability of certain items by adjusting their drop rates, the locations they spawn and the level of the player required to acquire said item(s).

You only notice “inflation” when you compare a game currency to a real-world currency. The amount of US dollars to buy gems is set by ANet and is a fixed value. The number of gems a dollar buys does not fluctuate, but the game gold to gem exchange rate does. Even so, the relative buying power of the gold you get by trading gems stays the same…meaning that if 1 gem got you 10 gold a few months ago, and today only gets you 1 gold, you can still buy the same amount of items for1 gold today as you could for 10 gold a few months ago.

Bottom line is that if you want to “preserve” your in-game wealth (buying power), always change your gold to gems whenever you can, and only change gems to gold when you are going to purchase.

Sunlyte.3768:

Most of the items players spend gold on are items they could get themselves but would rather purchase to save time. In the context of a game where both “items” and “gold” spawn from and despawn into nothing, the notion of “inflation” is somewhat misguided.

In the real world, currency came into play as a form of IOU when commerce revolved around bartering. This means that instead of trading you a goat for a bag of grain, I would give you an IOU (the generally accepted currency) that puts me in debt to you for the value of a goat. You could then keep that IOU and come back to me later, then give it to me and get the goat I owe you OR you could give that IOU to someone else and they’d know that the IOU is good for one goat from me or the goat vendor. This all works by a kind of mutual trust among the traders, who trust each other to uphold the generally accepted value of the chosen currency.

In a game, you can generate currency by selling imaginary items that always sell for the same price no matter what. When you loot a mob and collect some items, those items were generated by the game just for you and when you sell them, the currency you get does not have any value associated with it and does not represent debt (the NPC vendor does not go in debt to you because he is not giving you an IOU; the currency is generated from nothing at the point of sale). This is exactly the same for ALL players.

For this reason, it doesn’t matter how much money is floating around in the game because it’s tied to the drop rates of items in the game and is entirely arbitrary (as set by the game’s admins). The value of game currency is controlled by limiting the availability of certain items by adjusting their drop rates, the locations they spawn and the level of the player required to acquire said item(s).

You only notice “inflation” when you compare a game currency to a real-world currency. The amount of US dollars to buy gems is set by ANet and is a fixed value. The number of gems a dollar buys does not fluctuate, but the game gold to gem exchange rate does. Even so, the relative buying power of the gold you get by trading gems stays the same…meaning that if 1 gem got you 10 gold a few months ago, and today only gets you 1 gold, you can still buy the same amount of items for1 gold today as you could for 10 gold a few months ago.

Bottom line is that if you want to “preserve” your in-game wealth (buying power), always change your gold to gems whenever you can, and only change gems to gold when you are going to purchase.

Oh ok…… “x files music seems appropriate right now”

Sunlyte.3768:

Most of the items players spend gold on are items they could get themselves but would rather purchase to save time. In the context of a game where both “items” and “gold” spawn from and despawn into nothing, the notion of “inflation” is somewhat misguided.

In the real world, currency came into play as a form of IOU when commerce revolved around bartering. This means that instead of trading you a goat for a bag of grain, I would give you an IOU (the generally accepted currency) that puts me in debt to you for the value of a goat. You could then keep that IOU and come back to me later, then give it to me and get the goat I owe you OR you could give that IOU to someone else and they’d know that the IOU is good for one goat from me or the goat vendor. This all works by a kind of mutual trust among the traders, who trust each other to uphold the generally accepted value of the chosen currency.

In a game, you can generate currency by selling imaginary items that always sell for the same price no matter what. When you loot a mob and collect some items, those items were generated by the game just for you and when you sell them, the currency you get does not have any value associated with it and does not represent debt (the NPC vendor does not go in debt to you because he is not giving you an IOU; the currency is generated from nothing at the point of sale). This is exactly the same for ALL players.

For this reason, it doesn’t matter how much money is floating around in the game because it’s tied to the drop rates of items in the game and is entirely arbitrary (as set by the game’s admins). The value of game currency is controlled by limiting the availability of certain items by adjusting their drop rates, the locations they spawn and the level of the player required to acquire said item(s).

You only notice “inflation” when you compare a game currency to a real-world currency. The amount of US dollars to buy gems is set by ANet and is a fixed value. The number of gems a dollar buys does not fluctuate, but the game gold to gem exchange rate does. Even so, the relative buying power of the gold you get by trading gems stays the same…meaning that if 1 gem got you 10 gold a few months ago, and today only gets you 1 gold, you can still buy the same amount of items for1 gold today as you could for 10 gold a few months ago.

Bottom line is that if you want to “preserve” your in-game wealth (buying power), always change your gold to gems whenever you can, and only change gems to gold when you are going to purchase.

You are taxed when changing gems to gold so you might end up actually losing gold when you need to spend and exchange rate hasn’t risen enough for you to break even.

Izaya.2906:

You are taxed when changing gems to gold so you might end up actually losing gold when you need to spend and exchange rate hasn’t risen enough for you to break even.

I did not see anything about a tax on the TP window but it figures there’d be some kind of exchange fee.

Still, since gems don’t drop in the game; the only way new gems are added other than you buying some is when players who have them choose to sell them. If they are spent them on in-game items, the gem disappears.

You may not get a 1:1 exchange on gems to gold or vice versa so “playing the market” isn’t viable, but over longer terms whatever you lose in terms of paying the “tax” or fee is compensated for by insulating your overall buying power.

Sunlyte.3768:

Izaya.2906:

You are taxed when changing gems to gold so you might end up actually losing gold when you need to spend and exchange rate hasn’t risen enough for you to break even.

I did not see anything about a tax on the TP window but it figures there’d be some kind of exchange fee.

Still, since gems don’t drop in the game; the only way new gems are added other than you buying some is when players who have them choose to sell them. If they are spent them on in-game items, the gem disappears.

You may not get a 1:1 exchange on gems to gold or vice versa so “playing the market” isn’t viable, but over longer terms whatever you lose in terms of paying the “tax” or fee is compensated for by insulating your overall buying power.

Not sure how that works or will work for a considerable time yet, if you buy gems now with gold and need gold in the foreseeable future, you will most definitely be running at a loss

Sunlyte.3768:

Izaya.2906:

You are taxed when changing gems to gold so you might end up actually losing gold when you need to spend and exchange rate hasn’t risen enough for you to break even.

I did not see anything about a tax on the TP window but it figures there’d be some kind of exchange fee.

Still, since gems don’t drop in the game; the only way new gems are added other than you buying some is when players who have them choose to sell them. If they are spent them on in-game items, the gem disappears.

You may not get a 1:1 exchange on gems to gold or vice versa so “playing the market” isn’t viable, but over longer terms whatever you lose in terms of paying the “tax” or fee is compensated for by insulating your overall buying power.

Okay, the proper word for it is probably a fee and it’s roughly around 38% of what the current gold->gem cost so its pretty steep.

Two massive farming releases followed by a new crafting tier? I think we will be all right.

Mourningcry.9428:

Vol.5241:

What I personally would do is sell all your blues/greens that are currently occupy space in your bags/bank.

And then start farming invasions like hell and collecting stacks of champion boxes.

After the patch, open them all and sell the blues/greens on TP if it’s profitable to do so. You can hold hundreds of blues/green through no more than 10 stacks.

Careful now… let’s not forget that changing loot tables from containers already has precedent…..

LIVING WORLD
Watchwork boxes awarded from the Queen’s Gauntlet no longer contain coins.

There is always that risk, but I think doing that would reverse their intent on champion boxes.

I was just to late with my precusor, the day i would have had enough gold to buy it, it went up 150g =( This is sad. Will precursors drop in price or not? Do i ubberfarm to get it anyway, or just wait for it to drop in price?

Phoebe Ascension.8437:

I was just to late with my precusor, the day i would have had enough gold to buy it, it went up 150g =( This is sad. Will precursors drop in price or not? Do i ubberfarm to get it anyway, or just wait for it to drop in price?

Submit a buy order, then work on building more wealth. This way, one of two things will happen:
1. Your Buy order will get filled.
2. You will eventually save up enough to buy the Precursor akittens new, higher price.

Essence Snow.3194:

Players have left dungeons and meta event in favor of invasions b/c the invasion farming offers better guaranteed returns for time spent. The questionable reassignment of gold rewards for dungeons serve to provide evidence of mismanaged reward allocation.

Dungeons give more gold than an invasion (as well as tokens which long run guarantee you armor/skins that are usually sought after).

AC/TA/SE/CoF/CoE are all ~10-30 minute runs per path, and all give a flat 1.26g on top of ~4 boss chests, a bunch of blues and greens, and bags of boss gold (which isn’t much). Running two dungeon paths in the time it would take to do an invasion will net you more money than the invasion. What it won’t net you is more mats/rares/exotics but these have the opposite effect on the economy. There are enough dungeon paths to fill out at least half a day.

The major source of gold was the Gauntlet. That was literally an order of magnitude more gold than anything in the past. The invasions, now, make less gold per hour than CoFP1 did.

I have a question for the people knowledgeable in Economics:

Other then physically destroying currencies, in real life there’s no “money” sink, as mostly everything ends up having value and no money is physically removed from the economy (except the money destroyed, as I referenced above).

This game, anything bought at a vendor, anything traded on the trading post, anything that involves trading currency with an NPC is a subtraction of the currency from the economy. This means that it’s gone, it’s literally out of the flow.

Secondly, as player base increases, wouldn’t inflation go down as the money is spreading out.

Can someone correct me here if I’m wrong? as I understand it, unless core components of the economy change (TP fee, where the money goes when buying from a vendor), all inflation is temporary.

Saint.4789:

I have a question for the people knowledgeable in Economics:

Other then physically destroying currencies, in real life there’s no “money” sink, as mostly everything ends up having value and no money is physically removed from the economy (except the money destroyed, as I referenced above).

This game, anything bought at a vendor, anything traded on the trading post, anything that involves trading currency with an NPC is a subtraction of the currency from the economy. This means that it’s gone, it’s literally out of the flow.

Secondly, as player base increases, wouldn’t inflation go down as the money is spreading out.

Can someone correct me here if I’m wrong? as I understand it, unless core components of the economy change (TP fee, where the money goes when buying from a vendor), all inflation is temporary.

To answer your question. We do not know if there is already a slow constant inflation, since we do not know how much gold gets destroyed in the TP and Merchants versus how much gold generated. I suspect a very low inflation rate in this game but it persist.

Inflation could be or could not be temporary due to another factor, the supply of the goods. If people feel certain activities is more attractive, but that activities take them out of the production loop. You will face a shortage in that materials, and you will see price hiking. Prices hiking translate into inflation.

Gold>gems rate is getting quite ridiculous.

Hell Avenger.7021:

Saint.4789:

I have a question for the people knowledgeable in Economics:

Other then physically destroying currencies, in real life there’s no “money” sink, as mostly everything ends up having value and no money is physically removed from the economy (except the money destroyed, as I referenced above).

This game, anything bought at a vendor, anything traded on the trading post, anything that involves trading currency with an NPC is a subtraction of the currency from the economy. This means that it’s gone, it’s literally out of the flow.

Secondly, as player base increases, wouldn’t inflation go down as the money is spreading out.

Can someone correct me here if I’m wrong? as I understand it, unless core components of the economy change (TP fee, where the money goes when buying from a vendor), all inflation is temporary.

To answer your question. We do not know if there is already a slow constant inflation, since we do not know how much gold gets destroyed in the TP and Merchants versus how much gold generated. I suspect a very low inflation rate in this game but it persist.

Inflation could be or could not be temporary due to another factor, the supply of the goods. If people feel certain activities is more attractive, but that activities take them out of the production loop. You will face a shortage in that materials, and you will see price hiking. Prices hiking translate into inflation.

Makes sense, I would like to ask, since the materials we are talking about are crafting material, for the most part, it will always be necessary (unless they never touch crafting again and do not make the 1 to 400 leveling important in any way)

Therefore, while the price hike will occur, it will still be temporary. I guess the price will inflate, but not by much, because there will always be people gathering some type of mat.

Direksone.3867:

Gold>gems rate is getting quite ridiculous.

poke
I’d bet my life savings that this gem inflation is intentional at Anet. The price inflates, making new users turn to buying gems with money rather then the exchange rate. A player with no money coming into the game is going to think trading gems is insane. They just had their free way, so they are expecting an influx of new players.

I don’t see Gems going down ANY time soon.

Saint.4789:

Other then physically destroying currencies, in real life there’s no “money” sink, as mostly everything ends up having value and no money is physically removed from the economy (except the money destroyed, as I referenced above).

This game, anything bought at a vendor, anything traded on the trading post, anything that involves trading currency with an NPC is a subtraction of the currency from the economy. This means that it’s gone, it’s literally out of the flow.

If we ignore credit (which is a huge oversimplification in the real world) this is more or less correct.

In both cases the rates are related by a simple relationship:

Accumulation = Generation – Destruction

In the real world economies, as you pointed out, the rate of currency destruction is low. That means to keep accumulation low, generation must also be low.

In GW2, generation is enormous – just look at the amount of raw gold created every time you go out to play. This means that destruction must also be enormous if accumulation is to be kept in check.

The strength of GW2’s money sinks rests on the 15% TP fee – because it scales up with the amount of money in the economy. Even T3 cultural armor is only a one time sink, and only pulls a flat amount of money out. The TP fee takes 15% over and over and over again – the game cannot generate more money than the TP fee can sink.

Saint.4789:

Secondly, as player base increases, wouldn’t inflation go down as the money is spreading out.

If the amount of money in the economy was fixed that would absolutely be the case.

It isn’t fixed, though: the rate of gold generation scales with the number of players (more players farming = more players generating gold). So if you doubled the number of players, you’d also double the rate of gold generation, and double the rate of gold destruction, and with the way these things scale you’d have roughly double the amount of money sitting around in the economy.

Saint.4789:

Can someone correct me here if I’m wrong? as I understand it, unless core components of the economy change (TP fee, where the money goes when buying from a vendor), all inflation is temporary.

You’re right that all inflation is temporary – in the real world central bankers work really hard to balance money flows to keep inflation within an acceptable range. Since WWII they’ve done a pretty remarkable job of keeping inflation in a controlled range, enough so that most people kind of understand slow, stable inflation to be ‘normal’.

But it’s all temporary. In reality there are a bunch of different market forces pulling on supply and demand on a large scale, and those are all changing over time – not just when something big changes, but as people accumulate wealth and their goals and farming patterns change. Big bursts of inflation, or deflation, in the economy these days are going to be from something changing – and recently we’ve had a lot of big changes.

Essence Snow.3194:

I stopped bothering to listen to him a while back as there is nothing of worth to gather from the words he is permitted to say to us. Kinda like the words of a fortune being meaningless as they are so generalized that they may apply to anything.

Yup, precisely. John is barely allowed to tell us anything and when he does it’s so vague and cryptic that it’s essentially worthless.

I can think of absolutely no reason why the player base shouldn’t be permitted access to basic information about the economy. His remark about the median returns from gauntlet farming is a perfect example. The median alone tells us almost nothing. What was the mean? What about gold earned by the top quintiles or deciles and the population statistics to match?

Saint.4789:

Direksone.3867:

Gold>gems rate is getting quite ridiculous.

poke
I’d bet my life savings that this gem inflation is intentional at Anet. The price inflates, making new users turn to buying gems with money rather then the exchange rate. A player with no money coming into the game is going to think trading gems is insane. They just had their free way, so they are expecting an influx of new players.

I don’t see Gems going down ANY time soon.

Gem prices will fall after Sept 1 – high demand from the Anniversary Sale is inflating gem prices. Will they go below 800/40g? Yes. Will they go back down to pre-champ/event patch prices? No.

One interesting thing to note is the crafting patch – how desperate will some players be to get to 500 crafting? Will a non-insignificant portion of the player base decide it is worth $$>gems>gold to level crafting? If the answer is yes, we might see gems drop further in price than anyone might guess.

Broadicea.8294:

Essence Snow.3194:

I stopped bothering to listen to him a while back as there is nothing of worth to gather from the words he is permitted to say to us. Kinda like the words of a fortune being meaningless as they are so generalized that they may apply to anything.

Yup, precisely. John is barely allowed to tell us anything and when he does it’s so vague and cryptic that it’s essentially worthless.

I can think of absolutely no reason why the player base shouldn’t be permitted access to basic information about the economy. His remark about the median returns from gauntlet farming is a perfect example. The median alone tells us almost nothing. What was the mean? What about gold earned by the top quintiles or deciles and the population statistics to match?

That was my problem with his old posts. He gave some information out that was so vague it could mean a lot of things from completely different sides of the problem. It was so vague that it was borderline meaningless.

I can understand that he can’t give out specifics because people will use that to their advantage come time to implement change, but as I said earlier his statements were very Baghdad Bobish, i.e. “No American tanks here!” as they roll in the background instead it was (not a quote from him) “No significant problem here!” as large parts of the games market are in ridiculous situations.

Inflation is happening. All you have to do to see that is look at the gem price and other common commodities and compare that to the games 1st quarter.

-Iron ore was a flat ~10c per unit almost since launch up until late spring. Its over 60c right now and it was slammed up to 82c during these new farming events.
-Gold ore was around ~23c right up until late spring, went insane in June, got 100% of control with these events at 1.kitten at the top.
-Platinum ore was a super low and very flat ~11c since release up until late spring and commited suicide during these events maxing out at 1.kitten during these events.
-Gem prices have steadily risen since release but in a stepped pattern that looks like it gets a bump around each main event. The thing is, it doesnt return back to the pre event price level. It just keeps going up and up and as a result the value of gold goes down and down.

Makes sense. Gold is worth less as the game ages and commonly used commodities like basic ores go up with it, although with some lag in time depending on the severity of the impact of the event. The previous Halloween, Xmas and early spring ones were not so damaging. These farming extravaganza summer ones have been.

bugged post notes
~the “1.kitten” price is bugged and I can’t get it to show the correct price for platinum there. the max price for platinum ore was one point forty six silver.
~Max gold ore price was one point forty three silver

John Smith.4610:

https://forum-en.gw2archive.eu/forum/game/bltc/Economy-concerns/page/3#post2642294

John, respectfully, that is the type of post we are talking about. It doesn’t mean much. It’s a post. It’s in English. Thats about as far as it goes in terms of precise explanations of it.

John Smith.4610:

It’s actually very useful, you just need to apply a little work.
Think of what you know. You know that many, many people play the content, which means you know the distribution is dense.
Knowing the general shapes of dense distributions, apply a tail to each side, but I told you I eliminated one tail.
Now you have several possible models of total wealth gain for the content that you can get pretty accurate with only the one number. The individual isn’t important for what you’re attempting to learn, only the aggregate.

It’s actually really relevant, you just need to think about it.
Take a chicken. You know a chicken may or may not have feathers, which means balloons are great.
Knowing balloons are great, tie the chickens feet together, but I told you to cut off the chickens feet.
Now you have several chickens, which may or may not have feet. The feet are not important for what you want to know, just the balloons.

Yep…makes perfect sense.

Ensign.2189:

Saint.4789:

Other then physically destroying currencies, in real life there’s no “money” sink, as mostly everything ends up having value and no money is physically removed from the economy (except the money destroyed, as I referenced above).

This game, anything bought at a vendor, anything traded on the trading post, anything that involves trading currency with an NPC is a subtraction of the currency from the economy. This means that it’s gone, it’s literally out of the flow.

If we ignore credit (which is a huge oversimplification in the real world) this is more or less correct.

In both cases the rates are related by a simple relationship:

Accumulation = Generation – Destruction

In the real world economies, as you pointed out, the rate of currency destruction is low. That means to keep accumulation low, generation must also be low.

In GW2, generation is enormous – just look at the amount of raw gold created every time you go out to play. This means that destruction must also be enormous if accumulation is to be kept in check.

The strength of GW2’s money sinks rests on the 15% TP fee – because it scales up with the amount of money in the economy. Even T3 cultural armor is only a one time sink, and only pulls a flat amount of money out. The TP fee takes 15% over and over and over again – the game cannot generate more money than the TP fee can sink.

Saint.4789:

Secondly, as player base increases, wouldn’t inflation go down as the money is spreading out.

If the amount of money in the economy was fixed that would absolutely be the case.

It isn’t fixed, though: the rate of gold generation scales with the number of players (more players farming = more players generating gold). So if you doubled the number of players, you’d also double the rate of gold generation, and double the rate of gold destruction, and with the way these things scale you’d have roughly double the amount of money sitting around in the economy.

Saint.4789:

Can someone correct me here if I’m wrong? as I understand it, unless core components of the economy change (TP fee, where the money goes when buying from a vendor), all inflation is temporary.

You’re right that all inflation is temporary – in the real world central bankers work really hard to balance money flows to keep inflation within an acceptable range. Since WWII they’ve done a pretty remarkable job of keeping inflation in a controlled range, enough so that most people kind of understand slow, stable inflation to be ‘normal’.

But it’s all temporary. In reality there are a bunch of different market forces pulling on supply and demand on a large scale, and those are all changing over time – not just when something big changes, but as people accumulate wealth and their goals and farming patterns change. Big bursts of inflation, or deflation, in the economy these days are going to be from something changing – and recently we’ve had a lot of big changes.

Wow, thank you for that! Yes I forgot that in the real world there is finite, however in the game they can potentially generate the same amount of gold as a high generating player.

Now I see where people concerned about inflation, when a new player starts out, their generation will be based on the whites and greys they sell. If it gets out of hand they could get to a point where they are never making enough.

Dench.5968:

John Smith.4610:

https://forum-en.gw2archive.eu/forum/game/bltc/Economy-concerns/page/3#post2642294

John, respectfully, that is the type of post we are talking about. It doesn’t mean much. It’s a post. It’s in English. Thats about as far as it goes in terms of precise explanations of it.

A lot of people “farmed” events and duels in the Crown Pavilion. A lot more people didn’t. JS eliminated everyone from the calculations who did not visit the CP or who only went in a few times and didn’t get much in terms of rewards. This leaves a relatively small number of players who received at least 1g in rewards from it. While a very tiny number “farmed” the gauntlet and got a lot of gold from it, the vast majority did not and received only an amount in the single-digit gold ballpark.

The net effect on the economy was less than the recent AP chest giveaway where people received several tiers of rewards at once and many people got an extra 10-20 gold out of them.

That a tiny number of people walked away with 100+ gold is irrelevant. They will spend it on things like T3 armor (gold sink), precursors and other Legendary-related items on the TP (gold sink) or convert to gems (temporarily removing the gold from circulation). The event did not cause rampant inflation, nor will the current event. What it does cause is a shift in supply and demand – more people are running in zerg groups during the invasions, less people are out gathering items and materials. The upcoming changes to crafting and gear cause a shift in demand, while the supply is also shifting, causing prices to change.

The effect is temporary and when the SAB update is released people will be doing that instead, and anyone who doesn’t want to play there will go back to farming. Supply will increase and prices will decrease.

Stop acting as though nothing exists before or after this week. The game is designed to shift and change quickly, so the market will do the same.