Mr Kidd
Center for Advanced Studies
Gallente Federation
427
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Posted - 2012.03.17 10:41:00 -
[2] - Quote
Patri Andari wrote:MacLuven wrote:Incursions? The cause of this thing this weekend?
Not so sure about that.
Money supply is not a sufficient cause of inflation, a necessary cause but not sufficient.
There's a great historical example of an economy that experienced a high population growth, economic growth, productivity growth, and growth in the money supply, but experienced deflation. Eve, 2006-2007.
A growth in money supply isn't a problem so long as the economy can continue to grow fast enough to match the demand generated by the new supply of money. Theoretically.
Money supply is needed to fuel economic growth. Inflation occurs when inefficiencies develop in the economic structure and supply cannot match demand leading to price increases. If money supply increases and it is matched by economic growth, it is not necessarily inflationary. Practically it is inflationary because economies lag a bit in adjusting to its growth.
I'd be more easily convinced that there was a connection between the Incursion flood gates opening and the blow up this weekend if there hadn't been 13.5 months between when Incursions started and now.
And I don't see why how it could have caused the mineral markets to go so crazy.
If the flood of money creating a new super rich class, why are the ultra luxury goods, like faction battleships and tech 2 stuff not going up in price with trend?
The tech 1 battleships are all on a steep climb, but Rattlesnakes, Nightmares, and Vindicators are all trending down in price. Bhaalgorn's are looking stable. Machariels are the only ones going up.
That suggests to me that the run-away prices are a tech 1 phenomenon which means driven by the mineral market. That sounds like a supply shortfall and not a demand spike.
Checking on the tech 1 battleship volume numbers, they look pretty steady over time. So, it's not a spike in demand.
This looks like a mineral supply issue to me.
CCP hire this man. I do not know if he is right, but hot damn! Among all this bitter nit picking with little factual support, he actually made a analysis based on facts and supported it with reasoning. If he is right, and I am warming to the opinion, might not recent events that have caused many miners to stop mining be the blame? Ice interdiction coupled with the seemingly general rise in exhumer ganks. Add to that the recent bot purge and that could cause what we are seeing here. Not to mention speculation and mineral manipulation. Good job sir.
IDK, he points to 3 faction BS's going down in price as a lack of demand for luxury goods. As for the rattlesnake and nightmare, can't say, but the Vindi received a buff with Galente rebalancing which actually inflated it's price by at least 200mil that I'm aware of, probably more because I quit looking after it crossed the 1bil mark. So current down trends are most likely due to demand being suppressed by it's recent price increase.
He's making some assumptions, not necessarily tied directly to game mechanic changes which are the overall driving factors in price in game.
As for inefficiencies in the market, this is an area that I have a little bit of experience pertaining to T3 production. Last I looked, T3's and their subsystems, overall, were selling for less than market value of their build components. If we equate efficiency to competitiveness then it doesn't get more efficient than selling a product for less than it's component value. I suspect other product markets suffer from the same problem but, I cannot specifically verify this.
Which brings us to the mineral markets. Many people in Eve believe that resources they gather themselves are "free", i.e. they don't consider the resources' market value when pricing their end products. As such, I would expect that prices for end products are somewhat insulated from fluctuations in price changes because of the "resources are free" mentalities in Eve. My guess would be that price changes are driven more by speculators who are looking for value. Generally, these folks are knowledgeable of changes in game mechanics and are keenly aware of those changes. They don't examine the market, so much to find opportunity, but, look at dev blogs, Sisi and DB dumps as indicators of future directions.
While Macluven's assumptions, based on market trends and inflation, might be right on in the real world, he's not taking into account game mechanics which are telegraphed via dev blogs, Sisi and databases. Therefore, his conclusions about supply/demand, wealth and inflation are probably not accurate for Evedom.
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