Business And Economy Archive
Thread: Is the Bank Account a Form of Money Sink?
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Milgram
Thu Mar 17, 2005 10:31 pm
#1
I was doing some thinking, and i came to a topic i really need some input on. IRL, rich people put their money into bank accounts, bonds, stocks and businesses that employ others. It is part of the economy, being used to pay wages, allowing banks to give loans, and companies to expand. The money is tied to the owner, but is out in the world buisy being circulated. It pays for wages, loans and allows companies to expand while simultaniously it appears on its "owner's" bank or portfolio statement.
SWG is more like Unkle Scrooge in the cartoon Duck Tales (a classic from the early 90's). He kept a vast sum of money in a huge vault so he could swim in it (unkle scrooge used as an example because of his SWG like savings plan, not to imply that people are "scrooges" with their spending habits). It did not pay wages or circulate in the world, it sat in the bunker.Because wealthy folks keep all their money in their accounts, the credits are essentialy frozen untill the owner decides to pull some $$$ out of her mattress or mason jars burried in the back yard.
To put it another way, money in SWG is kind of like Ice. It is frozen in a player's account untill he decides to thaw some water off to give to someone else, who then freezes it along with the rest of his stack. In the real world, however, money is almost always in water form. If you put money in the bank, it is not frozen, it is off moon-lighting on you while it sits.
Due to solo groups, there has been a very large influx of credits into the economy. More than have been taken out through traditional money sinks. However, despite what a lot of people think, there has been little inflation (evidence). Are the bank accounts of players, their ice assets, actually acting as a kind of money sink? Especially players who try to stay above 10 million? Are they kind of like giant glaciers that tie up a ton of water, and if they ever thaw, it would drown us all?
I would appreciate your input. So far, i have done a really good job argueing with myself from both sides, so now i am just confused.
Message Edited by Milgram on 03-22-2005 12:23 PM
Pawlin
Fri Mar 18, 2005 12:00 am
#2
Yes.
But people aren't sitting on their cash due to beeing scrooges. Its just that there is not much so spend money on.
MBLAST
Fri Mar 18, 2005 12:09 am
#3
Scrooge McDuck! 
As the other poster said, yes, it's not like we're hoarding it or anything, it's just that we don't have anything to spend it on.
As the other poster said, yes, it's not like we're hoarding it or anything, it's just that we don't have anything to spend it on.
darth_new
Fri Mar 18, 2005 3:30 am
#4
see the thing is in real life some peeps like u say have ice money.mainly people with a higher income then exspenditure.for instance im 18 i live with my parents ( cheap rent ) no bills no hassle.i go to work get my money come home put it in the bank and save.when i got alot of money il buy somethin big like a motorbike,computer,drum kit and the list goes on.the thing is when i by that motorbike the money i spend goes down the river of the economy.in this game il do the same thing save money and buy an attachment or wat not.the thing is this money isnt goin down any river its just collecting on someone elses glacier.i think it isnt that we havent got anything to spend our money on its just the stuff we do spend it on is gonna get frozen as fast as we melted it.not many people in rl haveaglacier bank but in swg pretty much everyone does.....which is where we got a problem.
buster1
Fri Mar 18, 2005 7:05 am
#5
I think we need credits to go back into the system ie to NPC's let's have some NPC vendors that sell limited, non-tradeable but very desirable goods, i know that it's difficult to program in, butwe need something to reduce the glaciers!!I'm thinking maybe AA/CA's or weapon enhancements, transport enhancement, double the damage, speed etc that last for a limited time or use.
This ideamay have been mentioned and flamed previously...i'm unsure... but all feedback is welcome!!
Ramona_Garcia
Fri Mar 18, 2005 7:32 am
#6
From what I remember from a friday feature way back, the Devs track money influx and drains, and have been syphoning money off for some time. Maintenance, shuttle fees, vehicle repairs, cloning and insurance fees, blueprint purchases, space ship repairs and such all take creds away.
buster1
Fri Mar 18, 2005 8:11 am
#7
Yeah but not really a great amount is it, i was thinking of something that could syphon a higher amount rather than a few thousand which is nothing when you have millions banked up
Ramona_Garcia
Fri Mar 18, 2005 8:55 am
#8
Back then, which was before JtL and solo group adjustment, they stated that they were taking more money out than mission reward money was flowing in.
Zhentarim
Fri Mar 18, 2005 9:49 am
#9
I think alot of the iced credits are going to stay where they are for the most part. The real danger occurs if the vast sums of money from the "haves" suddenly winds up in the hands of "have nots", who'd indescriminately spend it on commodities they either don't need or otherwise wouldn't be able to have yet. Another problematic scenario is where people sell their ingame credits for real money, which could potentially bring alot of frozen credits into circulation again and damage the economy. However, I don't think this trend is very popular at the moment, since game credits go for a fair amount of money from said websites that offer the service.
It's also very limited how much money will be iced again once thawed - everytime someone buys crafted goods a small percentage of the money will disappear into thin air, as it gets used for maintainance on structures or used on supplies, which again would take a small percentage off the total amount of money spent.
Howver, if you consider the current cost/benefit ratio it doesn't take much to gain back the money lost in the system this way.
It's also very limited how much money will be iced again once thawed - everytime someone buys crafted goods a small percentage of the money will disappear into thin air, as it gets used for maintainance on structures or used on supplies, which again would take a small percentage off the total amount of money spent.
Howver, if you consider the current cost/benefit ratio it doesn't take much to gain back the money lost in the system this way.
Message Edited by Zhentarim on 03-18-2005 08:55 AM
EdOWar
Fri Mar 18, 2005 10:06 am
#10
I think your right. It's been mentioned in other threads before, but player's bank accounts do act as a kind of money sink, mainly because there's nothing else to spend their money on. Which is why lowering the credit cap (as others have suggested) is such a bad idea...because everyone would start converting their cash into assests, driving up demandand consequently prices as well.
Slim Vargo, Corbantis
Starcloud
Fri Mar 18, 2005 11:26 am
#11
One of the reasons you don't see real-world type inflation in SWG is because the bank doesn't pay interest on deposits, and does not report to 'stockholders' who want a 'return' on their 'investment.'
There's no pressure to make corporate profits, which would drive prices up, which would drive wages up or send people to unemployment... There are no employees. There's no 'cost of doing business' (OSHA, insurance, employee benefits, federal taxes)
SWG is a very simple economy. Because those millions and millions of credits are sitting in a bank account, doing nothing, they have no effect on prices. If the credits were put back into circulation, there would be a dramatic and ugly price jump... and then the credits would be sitting in the bank again, just infewer accounts.
Basically, big, successful wealthy crafters are a major buffer to control the flow of credits. They're a boon to the SWG economy, because they hold credits back from circulation and therefore actas a kind of money sink.
Ledao
Fri Mar 18, 2005 11:38 am
#12
Pawlin wrote:
Yes.
But people aren't sitting on their cash due to beeing scrooges. Its just that there is not much so spend money on.
There used to be plenty of things for crafters, at least, to spend money on.
I have complete stats for all my vendors dating back to the end of June '04. In that time period, with a total income of roughly 1.4 billion, I spent about 1.3 billion. And almost all of it was spent on my business.
I employed between 2 and5 peoplefull-time for that period, contracted hundreds of hunters, made a number of large resource purchases, and so forth. I made a number of people rich, and I can think of at least a dozen people who made 90% or more of their in-game money by working for me in one capacity or another. I even had one hunter make about 40 mil off of me in meat sales during 1 shift...
However, on the day the resource kits came out, I cancelled all of my standing offers for resources, fired my paid surveyors, cut my primary contract miners loose, and so forth.
The resource kits mean I don't need to buy any more avian meat (and they also mean that I can check for new resources from the comfort of my house on Rori, eliminating my primary need for hired surveyors), and the group harvesting changes mean that my guild can go out and get a few hundred thousand units of herbivore meat in a matter of hours.
The circulation of money was a big part of what made running a business in this game interesting. However, in one fell swoop, the resource kits totally eliminated the need for the thing that I've spent the most money on over my year-plus in business: avian meat.
Starcloud
Fri Mar 18, 2005 11:59 am
#13
And what happens when the resource kits become rare enough that you're only finding them for sale at thirty million credits?
Relying on resource kits to give you all the resources you need may work in the short term... in the long term, it's not a sustainable option.
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