I am a bit fascinated by the gold squish, and would like to predict the effects / outcomes.
Consider the following as a set of ideas for discussion...
Three of us are in a lifeboat, dying of thirst.
One of us has an orange.
One if us has £100
Q. What is that orange currently worth?
A. £100.
The third of us finds £1000 in a back pocket.
Q. What is the orange worth now?
A. £1000.
Q. Has the orange become bigger or better?
A. No.
Q. What has happened?
A. The Money Supply has expanded.
Q. How does this relate to Warmane's cash crunch?
A. It points to a case for stopping the exchange of coins for gold?
I'm on a train now so will sign off until this afternoon. TY for reading.
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Member
Gold squish... predicted effects from chairman of a finance house...
Edited: December 6, 2016
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Banned
that comparison sucks because there are things with fixed prices (vendors and trainers), which will mean the poorest will be affected the most
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Member
Hi Selaya sorry you don't like the illustration...
There are other causes for high prices... the classic example being a 'bubble' caused by speculation. This type of problem is best illustrated by recent turmoil centred on property and mortgages or by a phenomenon known as 'Dutch Tulip Mania' (which Google and Wikipedia know all about and is such a good example of how terminally stupid most of us are).
In both these examples, the price of a good has been driven beyond its notional value by speculators who purchase on the basis that they will resell at a profit, rather than consume or use the good themselves.
An example on Icecrown might be Black Pearls. This 'good' is selling well beyond its value in terms of the grind required to find one. The inflated price is due to players buying up cheap pearls and relisting them at an inflated price.
So we have two factors that are driving price rises...
1) classic inflation due to debasemant (eg lots of new gold being created by coin purchases)
2) asset inflation due to artificial demand created by speculation.
My train has arrived more later.
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Moderator
You are already wrong here. No gold is "created." We don't "sell gold for coins," we allow players to sell their farmed gold to other players for coins. All the gold involved only trades hands, having to be acquired in game by a player beforehand - the server has a gold pool of 1 billion gold, for example, and player A sells a hundred thousands of his farmed gold to player B for coins; the gold pool for the server is still the same 1 billion gold.
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Banned
That comparison is not applicable. RL money supply is basically limitless, which is not true for World of Warcraft (short of dupes). RL money also carries no intrinsic value nor usefulness, again which is untrue for World of Warcraft.
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Member
@Obnoxious ...
Hi! Thanks for pointing out that coins are traded for existing gold rather than created gold. That's a better way of doing it (I haven't played in a while so snaps to you guys).
New gold comes now from killing mobs, completing quests, and selling items to vendors... none of which you guys are responsible for.
So...
Q. What is EXPECTED to happen to the price of Black Pearls on Icecrown after the squish?
Q. What will ACTUALLY happen to prices across the board?
ty for reading more later...
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Banned
what is supposed to happen is that the price of it would half, but what actually will happen even the wisest cannot tell
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Member
Pretty sure most will try to get rid of the gold b4 cut, buying boes and mats, so they can sell them after. I think prices will be lower , but i doubt it lasts longer than a day or two, as this economy is small so it also recovers very fast.
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Member
Gold squish will accomplish 1 single thing, making the rich, richer.
How you ask? very simple, the people that have a couple of thousand gold, the new players lets say average 10-100k across a few toons, these are the people farming, and buying gems etc new enchant's generally just playing the game, the gold squish hurts them the most, as gold actually has value to them, and since they are the supply line of gold from questing from farming etc they will now get hungry with said gold after squish inflating prices, but guess what they now have barely any gold to trade.
Who has the gold then? The full bis players that spend no gold what so ever, the people that dont need to re-enchant gear or buy new gems.
It just accumulates into a few hundred thousand for the majority, these people are who benifits from the gold squish losing 50% of your gold when some have over 1 million gold sitting there doing nothing does nothing, because as ive said they spend it on nothing, gold squish only increases value to the new players, value = greed = higher pricing = they very new people get sky high pricing on the simplest of items.
Currently prices are hella low, which imo is a good thing compared to how it was on Molten, Battered hilts costing 20k plus a single gem for 1500g? etc, Imagine attempting to start fresh back then compared to now.
TLDR: Gold squish waste of time not needed.
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The Wise
First week prices will be cheaper as people will have less gold to spent on general goods,as time passess prices will rise to standard % of value before squish .
Somethings will be more expensive (mostly tbc mats i presume).But rest shoudnt not be expensive.
Prior to squish prices will prolly go up consdiering people will try to hoard items instead currency.
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Member
the squish's will be done regardless, no point in bringing it up over and over again
just sit back, relax and watch as events unfold
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Member
The truth is that the value of the apple hasn't changed. Neither has the value of the money. A $100 bill is really worth no more than a $10 bill. We simply ASSIGN another value to it. That is just a game that all of us play together, and that 'value' instantly changed if everyone were to decide that a $100 bill was worth another amount . But the money itself is worthless. That is why people are happy to trade it for stuff like toilet paper and paperclips.
Money obtains value only at the moment that you trade it for something which has value.
Therefore, even though economists like to define Inflation as the decrease of the value of money, it is really just the increase of greed.
That has to do with the nature of being rich. Being rich is not about having little or much money, it is about having more than the rest of us.
THAT is the driving force behind inflation. And it is the truth about the value of money.
Money is SUPPOSED to be worthless, otherwise people would never gladly trade it for worthy stuff like clothing and food.
It is a matter of psychology as well.
Suppose you have $1000, and you work to make $100, then you think you did well because your balance increased by 1/10. But the next $100 you earn is an increase of only 1/11, the next $100 is an increase of 1/12 and so forth. This impresses the illusion on people that they need to work ever harder for ever littler gains.Edited: December 9, 2016
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Banned
Warmane should have made Transmog Scrolls for ~100k gold icecrown and ~15k gold Lordaeron.
That whould be nice legit gold sink that game had not before.
That gold squish is absrud and will bring nothing, same as rates change idea brought. Nothing.
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Banned
Untrue. A Portable Hole will forever and always cost 3,000 gold, for instance
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Member
Thanks for the replies... wasn't expecting such high quality responses!
In terms of whats ACTUALLY happening...
I only know a few players here well enough to chat with them about their plans for their characters. The ones I've spoken with are spending their gold. They are buying items that they expect will retain their value aftter the squish. The effects of multiple buyers trying to dump their various wares into the auction in January are easy to predict.
@ Selaya ... true... EXCEPT when 10,000 greedy players who have ALL bought portable holes to avoid the gold squish symultaneously dump them into the auction!!!
@ itsyouitsme ... 'Hole in one'! Ultra expensive items designed to lure the ultra rich into spending their great wealth, would provide a valuable 'sink' for currency and maybe persuade some of them to come out of retirement!
@ Shiarta ... greed... gotcha yes... but a critical element is the expanding supply of available currency which makes the greed problem worse.
@ Ghinbedi ... nice.
@ Peregrine ... yes you're probably about right. How well this works for them is yet to be seen!
@ Thydus ... I like your answer the most... it's so full of barely surpressed rage! Totally agree... but...
High prices seem to actually play into the hands of new players who are paid well for each looted item they sell at auction. The extreme price highs seem to happen in relams that are trailing off... the production chain for goods is broken so players that have... say... herbalism and alchemy get to corner the market for potions... or may be the only players producing items at that time so can charge what they like. This is something we have all seen before.
@ sukacakers ... yep.
hehe thanks for all the replies given me lots to think about!
