Talk of gold/gem price inflation is hogwash.

Talk of gold/gem price inflation is hogwash.

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Posted by: Herr der Friedhoefe.2490

Herr der Friedhoefe.2490

Most of you have never traded on the stock/options market so you probably don’t understand “the spread”. The spread is the difference between the best buy offer, and the best sell offer.

Gems are more expensive now in game gold terms, and yes desired items on the trading post are more expensive than ever, but you can’t just buy your way into this game now. At least, not as easily as you could at the start of the game.

The price of gems, per game gold has climbed steadily since day 1.

The gems per real world money has stay constant.

But, the difference between “the price of gems for game gold”, and “the gold given for gems for sale” has steadily gotten farther and farther out of whack. This is called “the spread”, and Anet is using the spread as yet another gold sink.

Yeah you can pull out the credit card again to buy something you want, and you’ll get less for your money than you did at the start, but that’s because of “the spread”, and not because of “inflation”. Anet is steadily draining gold from this game.

I fully expect this post to be deleted.

My posts are facts as I know them, or my own opinion, and do not represent any guild.

Talk of gold/gem price inflation is hogwash.

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Posted by: Svetli.4276

Svetli.4276

new ppl who don’t have money or exp how to get money will buy gems with dollars
simple

“What you wish for may not be what she wishes for.” – Skull Knight

Talk of gold/gem price inflation is hogwash.

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Posted by: Herr der Friedhoefe.2490

Herr der Friedhoefe.2490

new ppl who don’t have money or exp how to get money will buy gems with dollars
simple

If they have sort of disposable income, and they are willing to spend it.

My posts are facts as I know them, or my own opinion, and do not represent any guild.

Talk of gold/gem price inflation is hogwash.

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Posted by: GSSBlunaspike.4153

GSSBlunaspike.4153

new ppl who don’t have money or exp how to get money will buy gems with dollars
simple

If they have sort of disposable income, and they are willing to spend it.

It’s sad, but you know he’s right. They are going to come in, get caught up in that awesome starter area and yeah. A few months later they’ve put more into it than they would have a sub to WoW, then they look back and go “kitten I’ve just gotta keep playing because I put so much money into the game”.

Talk of gold/gem price inflation is hogwash.

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Posted by: Zepidel.5349

Zepidel.5349

“I’m just finished reading a new york best seller on modern economics, I’m smarter than all of you plebs who dont know anything”

Riddle me this Mr. Smith what did $20 of gems buy 6 months ago? And what can $20 of gems buy you now?

Protip: Alot more stuff

Talk of gold/gem price inflation is hogwash.

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Posted by: Behellagh.1468

Behellagh.1468

Most of you have never traded on the stock/options market so you probably don’t understand “the spread”. The spread is the difference between the best buy offer, and the best sell offer.

Gems are more expensive now in game gold terms, and yes desired items on the trading post are more expensive than ever, but you can’t just buy your way into this game now. At least, not as easily as you could at the start of the game.

The price of gems, per game gold has climbed steadily since day 1.

The gems per real world money has stay constant.

But, the difference between “the price of gems for game gold”, and “the gold given for gems for sale” has steadily gotten farther and farther out of whack. This is called “the spread”, and Anet is using the spread as yet another gold sink.

Yeah you can pull out the credit card again to buy something you want, and you’ll get less for your money than you did at the start, but that’s because of “the spread”, and not because of “inflation”. Anet is steadily draining gold from this game.

I fully expect this post to be deleted.

No the difference in the two exchange rates is the same ratio as it always has been. The Gems to Gold is 72.25% (or 85% x 85%) of the Gold to Gems rate. There are no buy or sell offers at the exchange, it’s purely mechanical based on the ratio of internal pools of gold and gems at the exchange. As long as more Gems are bought than sold to the exchange, the more the rate will go up and the rate of rise will increase.

Gold for Gems was never the primary way to get Gems for the Gem Store. It’s always been cash and that cash pays ANet’s bills. The exchange is a service to those who drive the economy and as a means to provide the Gold sold to players for cash via Gem sales.

We are heroes. This is what we do!

RIP City of Heroes

(edited by Behellagh.1468)

Talk of gold/gem price inflation is hogwash.

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Posted by: Herr der Friedhoefe.2490

Herr der Friedhoefe.2490

Riddle me this Mr. Smith what did $20 of gems buy 6 months ago? And what can $20 of gems buy you now?

I actually pegged my mark to stuff I’m planning to buy, exactly one character slot, and I’m not willing to spend any more real world money on this (for a variety of reasons).

A gem buyer using only game gold will be paying more for that item now.

A gem buyer using real money will be paying the same for that item.

A gem buyer, using real money to buy a non-TP item is going to spend more real money for that item but not totally because of inflation, but because of “the spread”.

Item prices are outstripping the value of real world money, vs the gems they can buy, because of “the spread”.

My posts are facts as I know them, or my own opinion, and do not represent any guild.

Talk of gold/gem price inflation is hogwash.

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Posted by: Herr der Friedhoefe.2490

Herr der Friedhoefe.2490

No the difference in the two exchange rates is the same ratio as it always has been. The Gems to Gold is 72.25% (or 85% x 85%) of the Gold to Gems rate.

With the median price increasing steadily, the spread increases as well. Of course there is daily fluctuation.

My posts are facts as I know them, or my own opinion, and do not represent any guild.

Talk of gold/gem price inflation is hogwash.

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Posted by: Vespus.4289

Vespus.4289

TL:DR —- below

First off, I agree with your comments about the rising price/value of gems in terms of gold, the static price of gems in terms of real dollars, and the existence of “the spread.” However, I feel as though your argument has been founded on a rather shaky premise, as the price of gems (or “the spread”) has not, in itself, caused a decrease in the real value of real dollars.

Since people are buying gems with cash, gems with gold, and gold with gems, things are not so one-sided. Yes, with some of ANET’s recent additions to the game (Champ boxes, Crown Pavilion, etc etc.), some people have acquired stupendous amounts of gold. Also, with these “10 days of sales” that is occurring right now, people have been, in general, demanding more gems than usual. As such, multiple factors have contributed to the increase in gem prices.

When you say that a “gem buyer, using real money to buy a non-TP item is going to spend more real money for that item,” you would be incorrect in saying this if this gem buyer were purchasing an item from the gem store (non-TP). The fact of the matter is that, as you correctly pointed out, gem price in terms of real dollars is a static value and has not changed since the start of the game. Therefore, gem buyers would be paying the same amount ($20 for 1600 gems or a Molten Alliance mining pick + Consortium harvesting sickle) for any gem store item they may wish to buy. They would not be spending more real money for that item due to any reason.

If they wanted to purchase a TP item by converting gems into gold, they would be obtaining a nominally larger sum of gold than they previously would have. Since prices are constantly changing on the TP and there is no set “basket of goods” that we can account, there is really no way to feasibly calculate inflation in the GW2 TP unless we ask ANET directly. So the player may or may not be spending more real money for current TP items. They are, however, getting more gold for their real money today (relative to 2 months – or even 2 weeks – ago). This fact is indisputable – just look at the data on the Currency Exchange.

“The spread” in gem prices is hardly applicable to any short-term economic events. People will not sell 100 gems for gold, and then “flip” this gold for <100 gems. That’s just silly thinking. “The spread” is, in the end, just a variable that is determined by a fixed ratio. It is there to deter people from feasibly “flipping” gems and gold in the short term. It does not affect the value of real life dollars in terms of the quantity of gems able to be purchased.

(edited by Vespus.4289)

Talk of gold/gem price inflation is hogwash.

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Posted by: Vespus.4289

Vespus.4289

The spread in TP prices is generally larger for “slower markets” (less often purchased/sold) and smaller for “faster markets” (more often purchased/sold) (but you probably knew that already). “The spread” can often increase and decrease without warning due to sudden shocks to the market. Like the gem “spread,” it is does not, in itself, cause anything to happen. It is inherently a product of other forces at work (e.g. someone suddenly buys up 5000 of an item and drives up the price by 50g – now the spread has increased by 50g —- and vice versa) and is acted upon by players seeking profit. Through competition in the market, the spread will eventually reach a level appropriate to the item’s market. Though the spread may remain the same, the price levels may have fallen or risen (and so inflation may have increased or decreased). Thus the “value” of gold is not affected by “the spread,” but rather, as intuition would have it, inflation.
———————
Your argument is correct – any talk of gem price inflating the economy is certainly hogwash. However, that is not due to any spread or peanut butter or margarine. It’s due to a combination of factors – an increase in the amount of gold held by players (“wealth effect”), a increase in the demand for gems, and perhaps (but not necessarily) inflation. Your argumentative points seem to be a bit confusing – perhaps you mixed up gems and gold at one point?
ANET does tend to lean towards deflating the economy (to encourage new players to stay players, for starters), but in recent updates this policy seems to have been flipped on its head. In the long run, I expect gold to be “steadily drained from the game” but right now, with wp price reductions and such, there seems to be more gold than usual in the GW2 economy. Inflation has occurred in certain markets, and deflation has occurred in others, per usual. I expect recent events have been the product of short-run shocks to the economy, and will eventually level out (this, assuming ANET has a plan laid out).

TL:DR
Reasoning is wrong on two points – “the spread” does not decrease dollar value (dollar value/gem purchased is a constant ratio) or gem/gold value (supply/demand of gems/gold in the market determines this), and a gem buyer will not spend more real money to buy a non-TP item. Otherwise, the facts are correct, though in all honesty the argument was a bit pointless (objectively speaking – no offense intended!) Thank you for speaking your mind!

(edited by Vespus.4289)

Talk of gold/gem price inflation is hogwash.

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Posted by: atheria.2837

atheria.2837

Most of you have never traded on the stock/options market so you probably don’t understand “the spread”. The spread is the difference between the best buy offer, and the best sell offer.

Gems are more expensive now in game gold terms, and yes desired items on the trading post are more expensive than ever, but you can’t just buy your way into this game now. At least, not as easily as you could at the start of the game.

The price of gems, per game gold has climbed steadily since day 1.

The gems per real world money has stay constant.

But, the difference between “the price of gems for game gold”, and “the gold given for gems for sale” has steadily gotten farther and farther out of whack. This is called “the spread”, and Anet is using the spread as yet another gold sink.

Yeah you can pull out the credit card again to buy something you want, and you’ll get less for your money than you did at the start, but that’s because of “the spread”, and not because of “inflation”. Anet is steadily draining gold from this game.

I fully expect this post to be deleted.

All transactions should be BY PLAYERS not by ANET.

This TP garbage needs to stop.

For a real economy to crop up on a virtual world the PLAYERS must be the merchants and traders to the merchants.

If this were a real economy it would resemble the USSR at its worst with a monopoly that take gold that one “earns” but doesn’t give it to a PLAYER, they give it to the “game” which isn’t ANYONE.

The database doesn’t need the business.

People DO.

I agree and have expanded the reasons to use people instead of an ever increasingly expensive monopoly that doesn’t help a single player.

Yes, ANET you scrambled the economy and not in a good way.

Not keeping all IT jobs here is a major reason IT is so bad HERE. 33y IT 10y IT Security