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Is economic inflation (the value of gold) a concern for anyone else?


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#1 Castaa

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Posted 04 October 2013 - 11:10 PM

The prices of things seem to be increasing quite a bit over the last month or two.  I think largely due to increased magic find and champion loot changes.  This effect has been somewhat mitigated by players salvaging gear for Luck but as that starts to become less advantageous, now that gear is going to be vendor sold more and more, greatly increasing the amount of total gold in the economy.

Does the game need more gold sinks?  Or do people sitting on a lot of gold fear it's depreciating?  Any hedging strategies?

Gem prices have really dipped today.  I converted most of my gold into gems.

Edited by Castaa, 05 October 2013 - 01:46 PM.


#2 Nabuko Darayon

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Posted 04 October 2013 - 11:44 PM

Not really, ascended crafting has increased the demand for a lot of stuff (especially t6 mats)

And converting to gems now is really not advisable since they're still high from Tuesday

EDIT; Actually yeah the gems are really dropping right now. 25S within few hours.

Edited by Nabuko Darayon, 04 October 2013 - 11:52 PM.


#3 NerfHerder

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Posted 05 October 2013 - 01:48 AM

Not nearly as much as it does IRL.

In game currencies are smaller, easier to manage, and less subject to shenanigans. If it does get out of hand, ANet can probably fix it on their own.

#4 raspberry jam

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Posted 05 October 2013 - 02:49 AM

There will always be inflation in a game like this. Always. Gold sinks are useless for fighting inflation unless they are so strong that playing the game becomes a chore. I can show you the math of that if you want, though understanding it by common sense is very easy.

#5 Castaa

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Posted 05 October 2013 - 02:53 AM

View Postraspberry jam, on 05 October 2013 - 02:49 AM, said:

There will always be inflation in a game like this. Always. Gold sinks are useless for fighting inflation unless they are so strong that playing the game becomes a chore. I can show you the math of that if you want, though understanding it by common sense is very easy.

Enlighten everyone then.

#6 Trei

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Posted 05 October 2013 - 07:59 AM

View PostCastaa, on 05 October 2013 - 02:53 AM, said:

Enlighten everyone then.
Gold sinks are not there to prevent or stop inflation.

As long as there is people to people trading, it is true that there will always be inflation, only to what degree.
This applies both in a game as well as in real life.

As a matter of fact, an economy without inflation often means it is stagnant. Do you like a stagnant economy?

Therefore it is actually healthy for a market economy to have very slight inflation, as it means we are getting more money than we are spending, just not so much more that we need not care about expenditure.

It is desired as a tolerable buffer against something much worse; deflation. Nobody wants their gold to be meaningless banana coins.

For prices to not rise, you will have to be content to deal with only NPCs.
As long as a live person is your counterpart, the question will inevitably be asked - How much is this item worth to you?
And you won't be the only one answering that question to the seller, vice versa.

Edited by Trei, 05 October 2013 - 08:04 AM.


#7 davadude

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Posted 05 October 2013 - 01:33 PM

I have noticed this, but with the incoming pre-cursor crafting update, I'm not too worried.  Please, however, bring this up again in December.  After that update drops we can expect some stabilization, and if not, I'll agree it's a major concern.
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#8 Castaa

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Posted 05 October 2013 - 01:43 PM

I don't see how that's a coherent argument.  Ideally, if I'm saving gold in the interim, I would like 1 gold I earned a year ago have the same or more purchasing power a year later.  Why would I want it to purchase less?

If I know it's going to be worth less, I'm forced to speculate by converting it into something else (like gems) as a hedge which again ideally, I do not want to do since it locks me into another commodity of lesser value for an undetermined amount of time.

Edit: this was a response to Trei.

Edited by Castaa, 05 October 2013 - 01:44 PM.


#9 Castaa

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Posted 05 October 2013 - 02:03 PM

I like to look at the market price of unidentified dye as an inflation indicator since it it's drop rate seems to remain fairly constant and the dye is destroyed (removed from the economy) when used.

http://www.gw2spidy.com/item/20323 (select the lifetime price graph)

Edited by Castaa, 05 October 2013 - 02:05 PM.


#10 Ship Soo

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Posted 05 October 2013 - 02:12 PM

I for one have noticed a de-flation in the things I trade in: rares, dust and some others.

Rares are way down in price, 15% I'd say. Dust too. Down from 21s to 13 ish

The Queen's gauntlet pumped a TON of gold into the system. Inflation was rapid in those weeks.

Now that it's gone, I can see the money supply decreasing.
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#11 raspberry jam

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Posted 05 October 2013 - 05:32 PM

View PostCastaa, on 05 October 2013 - 02:53 AM, said:

Enlighten everyone then.
The basic desire in the system is to be able to play the game. Meaning you need weapons, armor, such things. You don't need an infinite amount of gear though, you only need to fill up the slots - as in, if you want three different suits of armor for some reason, you only need those three, not five more suits. Similarly with weapons. Thus there is a saturation limit when it comes to gear. It's extraneous, worthless items, so they are sold to the NPC merchant.
Gold on the other hand does not have a saturation limit. Gold can be used for almost anything, and does not take up any space, so you just keep all gold you get, plus the gold you get from the NPC. But when considering the auction house/trading post, gold is the means of purchasing items, meaning that items are the reverse means of purchasing gold. Since the total amount of gold in the system is ever growing, supply increases while possible demand (based on the total amount of trade postings) is kept relatively static. Thus the price of gold drops which is the same thing as that the price of everything else increases, which is inflation.

So why are gold sinks useless? Well it comes back to the base desire to play the game. Meaning that if gold sinks are weak, they obviously don't matter anyway, and if they are strong, people will go out of their way to bypass them (directly by doing things that have the same effect without the gold sink, such as walking/going through PvP instead of map traveling, or indirectly by farming gold to make up for the gold sink effect). The reason this alleviates the gold sink effect is that the gold sink is not attached to the market, and perhaps even more importantly, not associated to the NPC merchant (which almost literally is a printing press for money).
Therefore, gold sinks can temporarily fight inflation, but only until gear saturation is reached (after that, the effect of hundreds of thousands of people selling stuff to the NPC merchant is too much to handle).

Of course gold sinks could be made so severe, and so impossible to bypass, that the total amount of gold in the system simply doesn't go up. This would also mean that players could never get richer, which would be boring and a chore for most people. It is not a good idea.

Another idea could be to implement durability on all gear and either make repairs impossible or make them consume other gear (so that gear can't be turned into gold). This is the system used in for example Fallout 3. It's very hard to get right even in a single-player game, probably more so in an MMO.

Yet another idea would be to put the gold sink in the market: replace both the trading post and the NPC merchant with an anonymized trading post which simply keeps track of every type of item in the game and the amount of such items sold to the trading post, and sets the prices accordingly. Payment would have to be up front, but since the price setting is done by the server, not human players, they could be adjusted to minimize inflation and yet make people rich.

#12 Trei

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Posted 05 October 2013 - 06:00 PM

View PostShip Soo, on 05 October 2013 - 02:12 PM, said:

I for one have noticed a de-flation in the things I trade in: rares, dust and some others.

Rares are way down in price, 15% I'd say. Dust too. Down from 21s to 13 ish

The Queen's gauntlet pumped a TON of gold into the system. Inflation was rapid in those weeks.

Now that it's gone, I can see the money supply decreasing.
Deflation?
Or Disinflation? ;)

#13 Castaa

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Posted 07 October 2013 - 07:12 AM

I agree that gear reaches a saturation point and this changes the dynamics of the game's economy.  Especially as a MMO fails to attract new players/characters.

I define grinding as doing the same familiar event, task or encounter purely for the reward with very low risk of failure. Nearly all of PvE is grinding in one form or another once one hits 80. So saying all gold sink possibilities make this worse this doesn't hold much water in my view.  MMOs try to solve this by adding other currencies that can't be traded and this game is no exception.

I don't see an important reason why Anet decided to amp up low quality gear drops at all and in my view, accelerating inflation but not add other methods to soak up some of that excess gold. Maybe magic find's role in game is going to significantly change and salvaging gear is going to be preferable to vendoring it.  But that's a guess.

But all this really isn't my original point of why I made this tread.  I'm recognizing inflation is happening and might be accelerating in the coming months.  As a player that might be stepping away from the game for weeks or months, I was thinking of optimal hedging strategies to protect what I have saved.  Personally, I decided to cash out and start using Gems as method of gold storage/investment.  It's only alternative that I see as the most immune from devaluation in the relative long term.

#14 whodini

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Posted 07 October 2013 - 09:49 AM

if ur referring gold sink as to finding a better way than running with a serf all day long. I am all for it. sometimes I don't have the time to run dungeons but the way frostgorge is. its ludicrous to think that's even gaming. a game of monopoly makes more play style. watching a dog chase its tail for an hr compares to champ farming.  it needs beefed. even if they find other ways for rewards.

if ur referring gold sink as to finding a better way than running with a serf all day long. I am all for it. sometimes I don't have the time to run dungeons but the way frostgorge is. its ludicrous to think that's even gaming. a game of monopoly makes more play style. watching a dog chase its tail for an hr compares to champ farming.  it needs beefed. even if they find other ways for rewards. sorry. droid problems . typo. it needs nerfed

#15 daethwing188

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Posted 08 October 2013 - 06:04 PM

View Postdavadude, on 05 October 2013 - 01:33 PM, said:

I have noticed this, but with the incoming pre-cursor crafting update, I'm not too worried.  Please, however, bring this up again in December.  After that update drops we can expect some stabilization, and if not, I'll agree it's a major concern.

ANet has mentioned on reddit that precursor crafting is still on the roster to get released, but isn't high up on their list to get pushed out by the end of the year. It will likely get pushed to next year sometime.

#16 davadude

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Posted 08 October 2013 - 06:18 PM

View Postdaethwing188, on 08 October 2013 - 06:04 PM, said:

ANet has mentioned on reddit that precursor crafting is still on the roster to get released, but isn't high up on their list to get pushed out by the end of the year. It will likely get pushed to next year sometime.

I believe you 100%, but do you have a link to the Reddit sauce/source?
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#17 raspberry jam

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Posted 08 October 2013 - 08:30 PM

View PostCastaa, on 07 October 2013 - 07:12 AM, said:

As a player that might be stepping away from the game for weeks or months, I was thinking of optimal hedging strategies to protect what I have saved.  Personally, I decided to cash out and start using Gems as method of gold storage/investment.  It's only alternative that I see as the most immune from devaluation in the relative long term.
I definitely would have done the same if I cared enough about my in-game fortune. ANet has a vested interest in keeping gems high in value.

#18 Terra Miko

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Posted 08 October 2013 - 08:40 PM

View Postraspberry jam, on 05 October 2013 - 05:32 PM, said:

Yet another idea would be to put the gold sink in the market: replace both the trading post and the NPC merchant with an anonymized trading post which simply keeps track of every type of item in the game and the amount of such items sold to the trading post, and sets the prices accordingly. Payment would have to be up front, but since the price setting is done by the server, not human players, they could be adjusted to minimize inflation and yet make people rich.
That's how Materials and Runes were purchased/sold (aside from player to player trading) in GW1, and I found it pretty effective.

#19 ChuyDog08

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Posted 08 October 2013 - 11:33 PM

I think Anet screwed the pooch on the gold sink issue when they nerfed the use of Alts.  There should be more Account Bound Items instead of Soul bound.  I am guilty of spending IRL money to buy things off the gem store.  With my remaining gems, I cash in for gold.  The only items off the gem store that mean anything to me are teh harvesting tools and maybe every once and a while Instant Repair Canisters.  I think anything bought off the Gem Store should be account bound.  Gathering tools along with the only real endgame "Legendary Weapons", is keeping me from using my alts for anythingother than Mules.  Add Ascended Crafting and now you have made BIS gear unattractive for alts (not talking about how ugly they are either).  Oops, I forgot about the LS BullKitten.

Where is my point on gold sink?   When I was leveling all 8 of my alts I took time to spend gold on each as I leveled and outfit them with transmuted Exotics.  I never had more than a few gold at a time, but that was all I needed.  I had pride in the challange of leveling my alts and waiting to purchase the next upgrade.  I crafted my first legendary and it was immediatly clear that if I wanted to show off my new status, I could only play this alt.  I wasn't going to craft a legendary for another alt as it was too tedious.  I then started the LS and bought my first Unlimited Crafting tool (the mining pick).  I knew then the Soul Bound investment narrowed my ability to play alts.  I eventually bought all three Unlimited Crafting tools, and made a second legendary weapon for the same character.  Other smaller things are alt unfriendly too. My alts now make me money by being parked at rich nodes or JP's.  I even get free influence for my personal guild by them just logging in to them to make me money.

As for my main character,since I only use a main character to actually play the game, my gold piles up.  I have all level 400 crafting and now three 500 crafting professions.  I have the emperor title from buying all tier three armor, working on my 3rd legendary, crafted 2 ascended weapons, and much more.  Since there is no expansion or endgame in sight, I now run events, group for dungeons, do the Scarlet event, run gathering routs, and ocasionally WvW. I am salvaging every blue and green for MF which I am only up to 142% base.  I sell everthing on the trading post when I get a stack of materials for 1 copper less than current listing.  I speculate what the next trading post trend will be and try to increase my worth.  Everything makes money in the game if you don't have a reason to use alts.


View PostCastaa, on 04 October 2013 - 11:10 PM, said:

The prices of things seem to be increasing quite a bit over the last month or two.  I think largely due to increased magic find and champion loot changes.  This effect has been somewhat mitigated by players salvaging gear for Luck but as that starts to become less advantageous, now that gear is going to be vendor sold more and more, greatly increasing the amount of total gold in the economy.

Does the game need more gold sinks?  Or do people sitting on a lot of gold fear it's depreciating?  Any hedging strategies?

Gem prices have really dipped today.  I converted most of my gold into gems.

So to answer your main question, I do not think magic find is the only contributer to the increase in avaiable gold for players.  I don't think the game needs more Gold Sinks in general, but they do need to offer us something to spend our money on.  What that is, I don't have a clue.



Edit:

PS. The time gated crafting does not help the gold situation either.  I realized quickly that I could gather what I needed before my next time gate activity was available.  If this wasn't in the game I probably would have spent several 100 gold just to get my ascended crafting out of the way.  The result actually netted me a profit because I could gather faster than I could craft and sell off the excess mats to those not wanting to gather.

Edited by ChuyDog08, 08 October 2013 - 11:52 PM.


#20 Brizna

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Posted 09 October 2013 - 12:15 AM

To be honest I find this topic amusing more than anythign else. Inflation? In the last two months?

It depends what you are looking at. If you look at precursors yes. If you look at lodestones ... then certaily not. Anet has changed the loot tables across the board, overall making the not so exceptional loot more readily available, which has obviously meant a loss of value for it, while the greater supply of gold has made top tier loot more expensive, and that sums it all up; Having "exciting" loot means havign fun loot every day, legendaries can't drop every day and stay legendary for long.... as it is they aren't so legendary anyway.




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