Gold squishes are bad. Here is an alternative to reduce the gold in the market.
TL:DR; Introduce a Black Market Auction House-like system to reduce the amount of gold running in the system.
It's been my first gold squish - which didnt really affect me, I had 10k gold, I had 5k after, its a minimal loss, nevertheless I have seen no "positive" outcome from it.
"There is too much gold and everything is too expensive for new players" - I believe this is the only valid point to be done about the Squish. It is true that AH prices have come down by about 40% compared to before the squish - but still, once you have enough money, you didn't really care about it - you still make the same margin (if any).
The real issue is the terrible AH pricing and balance, general consume goods, such as flasks cost more to self-produce than to buy in the AH - leaving no profit to anyone that actually took time to level up alchemy. Most of the time, you are better off selling the plants and reagents than taking the time to make flasks, if you are looking for profit. Same principle applies to enchanting, mining, prospecting and most of the professions.
The botters are an issue. We know that, but we can all appreciate the effort put into banning them. The next issue is that WoW has, like most games, is that the currency is made out of thin air - you kill a MOB and it drops loot. This means that you need to remove gold from the economy to reduce the purchasing power of the player base. The current method are gold squishes.
My proposition is the next: Take the approach that blizzard took and make a black market auction house.
The concept is pretty simple: Remove gold from the game by selling players overpriced cosmetic or minor QoL items for gold. Thus, removing the gold from the economy. It's a pretty simple feat to accomplish, have a GM list a rare item in the AH with the option to bid only, starting at a reasonable gold price (2000g?), and let it rise up to whatever the population is willing to pay for it.
This item can be anything; 36-slot bags http://www.wowhead.com/item=51809, rare mounts http://www.wowhead.com/item=32458/ashes-of-alar or transmorg gear and scrolls, to name a few.
Ps- You can also trace the gold used to buy that stuff back - where did the auction winner of said item earn the gold from? Is he an AH broker? Did he buy with coins? Did he receive it from his guildmates? Or did he receive it from a third-party gold seller?
I believe this to be a much better way of stabilizing the economy than doing the gold squish, as those pretty much only annoy the population and make a terrible job of balancing the economy.
