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Why GTC Prices are dropping and will drop further

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raidnkill Greenspring	Posted - 2008.02.01 22:06:00 - [1] Edited by: raidnkill on 01/02/2008 22:07:29 The main source of this "problem" (for some) is due to U.S. Economy being in recession/ slowing down. when the U.S. Economy becomes weaker, the value of the dollar vs. other currencys drops. In this case, the U.S. Dollar has dropped and has been dropping against the Chinese Yuan. Not only chinese yuan, but US currency is dropping against currency of other developing countries. What does that mean? It means the ISK farmers from these developing countries will not bother playing Eve anymore, leading to not buying new GTCS, which leads to less demand in GTCs, which will mean that the Suppliers will compete with each other to sell their game-time-cards. Why were they isk farming in the first place? In China for example, there was a time when $1 was worth 8 yuan. Yuan in China is almost like a dollar in US. So if they gain like $10, for them; it's almost like they gained $80. And obviously, they would Buy the game time by buying GTCS. (From their point of view, our like $13/month is like $104/month for them) Nowadays, since the ratio of USD to Foreign currecny is becoming weaker, These isk farmers make less profit. They'll most likely stop farming for us developed world when they become one of us... But then again, there will eventually be less GTC sellers due to dropping demand which MAY increase the price or stabilize it. Yeah, Im insane or was it sane?
raidnkill Greenspring	Posted - 2008.02.01 22:09:00 - [2] Edited by: raidnkill on 01/02/2008 22:15:52 On the bright side however, THERE will be less isk farmers influencing our Economy But then again, that may cause a serious drop of demand for modules for their farming raven? Economy, pricing, and etc. are based on Supply & Demand. These chinese farmers go bye-bye will result in a huge drop in demand. Drop in demand will cause suppliers to compete with one another to try to sell off their product. That will cause a drop in price. What should you do in regards to buying or selling GTCS? Well, for one, I could be wrong, so don't rely too much on this post. :P If your a buyer and you think you could buy gtcs for cheaper later on, well it's your own risk buddy If your a seller and you think you can get most isk selling gtcs now then later, well it's your own risky buddy.
Dirk Magnum Spearhead Endeavors	Posted - 2008.02.01 22:19:00 - [3] There's a lot of questionable logic and misplaced assumptions there. Also they won't stop farming just because they experience a reduction in profit. All they have to pay is fifteen dollars a month for an account. Every billion isk that account sells, regardless of whether or not the buyer is caught, gives them a 200% return on their subscription investment. Worst case scenario they cancel a few farming accounts.
raidnkill Greenspring	Posted - 2008.02.01 22:23:00 - [4] Edited by: raidnkill on 01/02/2008 22:24:08 Originally by: Dirk Magnum There's a lot of questionable logic and misplaced assumptions there. Also they won't stop farming just because they experience a reduction in profit. All they have to pay is fifteen dollars a month for an account. Every billion isk that account sells, regardless of whether or not the buyer is caught, gives them a 200% return on their subscription investment. Worst case scenario they cancel a few farming accounts. These days, all I hear are Chinese farmers Are there actually American ISK farmers? If so, how many compared to their chinese counter-part? Everything is currency related, we don't see ISK farmers from Japan, Canada, France, Denmark, and Sweden for instance, they would be insane to waste so much of their time to take risks in making a little bit of their own currency And as the currency of the country that's being farmed for and the country where farmers are from stabilizes; those farmers will probbly find another job.
Sartaron Amarr LEGI0N	Posted - 2008.02.01 22:30:00 - [5] I bet you are american. How else could you think the existance of ISK-farmers is solely dependant on your dollars....
raidnkill Greenspring	Posted - 2008.02.01 22:41:00 - [6] Edited by: raidnkill on 01/02/2008 22:41:05 Originally by: Sartaron I bet you are american. How else could you think the existance of ISK-farmers is solely dependant on your dollars.... Yeah Isk/gold farming is purely based on the different rates of currency. For us, earning like $10 USD a day from gold/isk farming isn't much, but to them , $10 USD a day is $80, but that may change due to weakening of U.S. Economy.
Dragy Caldari Royal Hiigaran Navy	Posted - 2008.02.01 22:51:00 - [7] i can't wait till China sells their 800bil dollar deposit And change it for euro. Then dollar will fall like never before CLIENT BUG - CCP PLZ FIX THIS !
Abrazzar	Posted - 2008.02.01 23:11:00 - [8] Originally by: raidnkill Edited by: raidnkill on 01/02/2008 22:41:05 Originally by: Sartaron I bet you are american. How else could you think the existance of ISK-farmers is solely dependant on your dollars.... Yeah Isk/gold farming is purely based on the different rates of currency. For us, earning like $10 USD a day from gold/isk farming isn't much, but to them , $10 USD a day is $80, but that may change due to weakening of U.S. Economy. All they will do is change from dollar to euros. US currency isn't the only one in the world with value. -------- Ideas for: Mining Clouds
KISOGOKU	Posted - 2008.02.01 23:26:00 - [9] Actually first farmers i know were american when i was playing UO ,you can go and look UO fan sites for their advertisement Originally by: raidnkill ] Are there actually American ISK farmers?
Becq Starforged Minmatar Ship Construction Services Ushra'Khan	Posted - 2008.02.01 23:34:00 - [10] Prices for GTCs were somewhere around 120m a year or two, when I first heard of the whole GTC sales gimmick. I guess we were in a depression then? Hm. Must have missed it... -- Becq Starforged proprietor of Starforge Industries, a subsidiary of Minmatar Ship Construction Services At Starforge Industries, the world of tomorrow is being blown apart today!
Von Ulrich	Posted - 2008.02.02 00:32:00 - [11] Originally by: Dragy i can't wait till China sells their 800bil dollar deposit And change it for euro. Then dollar will fall like never before lol, China has more then that in US debt, but if they have way too many problems of their own economically to do something that could possible affect their biggest market. Buying hi and selling low isn't really a sound economic model.
Triath Lon Keepers of Balance Legion of xXDEATHXx	Posted - 2008.02.02 00:42:00 - [12] Edited by: Triath Lon on 02/02/2008 00:42:59 Alright, here's there real reason why GTC prices are dropping. *drumroll, please* SUPPLY EXCEEDS DEMAND! * clap, you bastards * People sell GTCs to get some iskies quick. There are crapload of people selling right now, so one has to drop their prices in order to get them iskies now, not hang out on forums and trade channels for days on end trying to sell at a good price. Linking GTCs to US currency... man, they should have in the next State of the Union! like someone actually gives a flying *** about their union* ________ Ambassador Extraordinary Plenipotentiary
Bacchanalian Stimulus	Posted - 2008.02.02 01:02:00 - [13] Originally by: Dragy i can't wait till China sells their 800bil dollar deposit And change it for euro. Then dollar will fall like never before Won't happen. China's an export economy at the moment (50% savings rate, just as an indication of how export-based their economy is) and a very substantial portion of their exports are sold to US consumers. Weakening the US dollar will lower the demand for China's exports as the prices for them raise in dollar terms. China is looking to expand its economy and grow right now, not to put itself into recession by driving the US into recession. China's national savings are in large part held in dollars. So for them to ruin the dollar, they ruin their own national savings in the process. You can't offload $1.4 trillion all in one place, and by the time the world economy catches wind of the fact that China is looking to do so the dollar will crash so fast your head will spin. Consider that when a random Communist Party member Cheng Siwei suggested that it might make sense for China to at some point consider diversifying their dollar investments in a public speech, it only took a few hours after that for the dollar to hit what was then its lowest point to date against the Euro and several other currencies. Now imagine what happens when word gets out that China has offloaded a few billion in dollars. For as foolish as the US government has been to allow the situation to reach this point, the Chinese government has been equally blind to allow it to get this bad. They aren't actively going out to buy dollars as much as it may seem, either. When you buy a Chinese import, the percentage of that purchase that goes back to the producer in China must then be immediately taken to the local banks and exchanged for Chinese currency. The banks must exchange the dollars with the People's Bank of China (central government bank) for Chinese currency at the going rates, and the PBOC stashes all those dollars away. Figure that happens at the rate of about $1 billion/day and you get an idea of how China is amassing dollars so rapidly. In any case, long story short, it's as much in China's interests as it is in ours to maintain a stable price for the dollar. Their economy and moreover their government depends on it. ____________________ GM Sunshine > oops Neurotica > Hate to see a GM in your gang say 'oops'
Pohbis Neo T.E.C.H.	Posted - 2008.02.02 01:28:00 - [14] No no no. The reason why GTC cards are crashing now is because I've converted all my ISK into Çs, thereby strengthening the Ç. I then use those Çs to buy cheap $ GTCs from US websites, undercut the other GTC sellers, generating even more ISK to convert to Çs and destabilizing the $ further, increasing my $ GTC buying potential by the hour. In 3 months, I'll have enough ISK to buy Chinas entire $ reserve and finally move out of Jita and into Beijing. With the cheap slots and materials from China, I can amass enough hardware to supply every mercenary alliance in EvE with ships to remove every major Alliance from 0.0. At which point I'll claim my righful place as the Emperor of EvE. Disband the Federation and buy the Senate. /EvE

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