Taking Stock: "The Fastest Growing Economy in the World"

Shaun Altman, young SL fox and stock exchange coder, hopes to fill the shoes of Warren Buffet some day.

I hope you're taking stock of the SL financial scene this weekend without having had your stock taken. Did you know that Second Life has the fastest growing economy in the world? Real world, that is? Take a look at the job description for Customer Service Relations on the lindenlab.com website, and note this claim:

"The L$ economy is by far the fastest growing economy on the (real world) planet."

Wow! No wonder we have some, er, growing pains, shall we call it? You thought it was just about age-old scams like the one named for Ponzi, or clumsy stupidity reacting to new American Puritanical casino laws? But it's merely because Second Life is the fast growing economy on the REAL WORLD PLANET, people! I simply don't know enough history or economics to understand if this is true; but I suppose China or Brazil or Germany or something simply don't grow as fast.

Of course, maybe it's easy to grow fast when your economy consists of a lot of fuzzy math or monkey numbers, like "8 million citizens" (really more like 250,000), or "$1,141,593 spent in the last 24 hours" (what will it be minus casino payments?). I always thought that was an amazing trick, given that the same website says that only $198,133 in LindEx activity was noted, and only 40,000 or so are logged on at any one time, and less than 500,000 spend more than $1 L per *month*. How do they do it?! So...I imagine that there may be challenges to this astounding statement, but let's think about it!

Hearing the RL voices of the various characters in the SL financial world actually did more to inspire distrust than dispel it!

THE SECOND LIFE MIRACLE

The rapidity of the SL economy is caused first and foremost by the ease with which you can get Linden dollars. You just buy them. It's like going to one of those third-world countries like Belarus where the dollar is worth 2,144 Belarusian rubles (known as "zaichiki" for the rabbit printed on their bills). Using that amazingly stretchable dollar, you can buy up 100 percent linen tableclothes, laquered boxes, vodka, and whatnot, for a song, at a fraction of the price elsewhere in the world. Then...you run out of stuff to buy. I think the United States imports...beaverboard and pine tar from Belarus in small quantities, so it's hard to get up a good economic boycott to try to influence their bad domestic human rights oppression, for example. That's why Belarus, exactly like Second Life, has turned to sex-trafficking, arms-sales, and casinos in recent years to try to balance its deficit and keep enough in the till to pay their outrageous tier prices -- which in their case is payments for the Russian gas they are dependent upon to keep warm in the winter -- and pass through to Europe so they can have fuel, too.

Or take the German mark Euro against the American dollar -- New York is wall-to-wall German tourists right now, precisely because even the expensive hotels here feel like a bargain.

So you feel like a king or queen in Second Life, strutting around and spending "thousands".

The other piece of the rapidity is the dream factor -- you buy the fabulous body, the mink coat, the sports car, the McMansion, and you've still got enough left over to keep yourself in sugar-free skim vanilla mocha lattes with whipped cream for the month. Your avatar may have strange and pricey appetities, but it's actually a fairly cheap mouth to feed, compared to your real-life self.

Yet another factor for at least 10-15 percent of the people who create things is that without a huge amount of labour, you can make something even in Paint and sell it even sometimes for lots of money, and keep selling copies of it effortlessly. There are no manufacturing costs, not materials to buy -- the Lindens keep rezzing out prims for free (that may not last) and L$10 is all it costs per roll of fabric (texture upload). To be sure, tier for land/server space can cost a bunch, but if you rent, you can pay less than what you "buy" land from Linden for, and still have a nice store for $20 or $22 US per month with 937 prims space on 4096 m2.

Land is also incredibly liquid, set it to sell a little bit below market, say $9/meter, and a robot will come and take it off your hands instantly.

Avatars playing store often spend more time building fabulous palaces than working out boring procedures -- it's more fun!

WHERE TO PUT ALL THOSE LINDENS?

So the economy burns along at a furious pace, spewing out Lindens for people, and where can they put them? As it's been said often about SL, help is easy to find; good help is impossible to find. You wouldn't mind labour costs, or investing in scripts or buildings, but the quality and realibility ranges from awful to awesome, sometimes even from the same person if they're busy, and it's a crapshoot. Until better consumer movements get started to rate builders and designers -- facing an incredible wall of harassment, vindictiveness, and hate from this class of people who don't want anyone to touch their Linden spigot -- we will go on having a problem being able to spend our Lindens on each other.

So, the moral of the story is, that while most people might only spend $1500 in 4 hours, which is what Lindens once told us was the average spend while online (I don't quite believe it), there are a few people -- and maybe this is a figure of several thousands -- who have boatloads of money, either because they rapidly deal in land, or have some war widget selling for gadzillion Lindens forever and a day on Slexchange.com or they have a particularly happy sugar daddy they escort.

So where do those people's money go? They could cash them out, but often, if they put too many Lindens out on the exchange, they'll be their own worst enemy, unable to cash them out at a "good price" as they lower the market. These market-movers, of course, *do* move the market, but Supply Linden is right there to sell more or less in competition with their goal of getting the "real" price of the Linden/dollar value.

They could put the money in real-estate, but then they'd have to pay tier, develop, do customer service -- hey, too much work. So what do these people holding in their hands the amazing firehose of the most rapidly-growing economy in the world *do*? They look for stocks, bonds, banks, stock markets, Ponzi schemes -- anything to soak up their vast collection of Lindens they don't have immediately use for, and can use to make even MORE Lindens without working! Work in Second Life is hard; investing is easy!

If you didn't have peculiar entities like "The World Stock Exchange" you'd have to invent them. I sometimes wonder if these things would fail less hard if they named themselves "The Little Stock Exchange on the Corner of 33rd and 3rd". That might lower expectations for performance in line with the actual ability of the often young, experienced types who launch them.

STOCK EXCHANGES: A FOOL AND HIS MONEY ARE SOON PARTED

I just spent 2 days meeting with Shaun Altman, coder of the first Metaverse Stock Exchange with the company Cyberland Equities, who is actually young but knowledgeable and experienced. He's the person not always noticed who came and bailed out Luke Vanderverre of the World Stock Exchange the first time, some months ago, by re-coding his platform. Shaun has always made a lot of money from SL in whatever he choses to do -- scripting, running poker parlours (now closed), building, or programming third-party applications. He's rather a private fellow who likes to talk off the record, so search him out and get to know him if you want greater understanding. He avoids the drama of blogs and forums almost completely -- except for that time he caused a stir advertising for a trophy wife, and Jeska didn't know whether to put the ad in "help wanted" or "new products" lol. He is a mentor who scripted the Lindens' popular balloon tour, but once, when the Lindens did something bad and terribly precipitous, he was in a group at a town hall complaining -- and go the Linden boot for three hours. He has been out of the limelight, but has been a persistent voice asking the basic question that others have about the WSE: "Where's my $13,000 US?!".

I always learn a lot from him because he's young enough to still be enthusiastic about what he does, yet old enough not to be a dick in explaining things to you if you have a lot of stupid questions.

WSE wound up losing my business with their clunky and stupid teleporter system that was all hat and no cattle.

I know understand a lot more about the stock exchanges than I used to, but stock exchanges have always baffled me in RL, where, whenever I was gifted with stock, I'd tend to sell it immediately precisely because I couldn't bear having to watch it "perform". I've never been able to visualize and fully comprehend why bricks-and-mortars companies that make widgets get to create a symbolic trading device called a "share" that acquires a life of its own -- but I take their word for it.

Basically, the SL stock exchange experience is all about a few dozen big players fighting among themselves, jockeying for market and mind-share, and trying to denigrate each other in order to win their game. It is a game of chicken, of sorts. It's also about a few smart people meeting some dumb people, as in any economy, and getting fleeced. It's about people imagining themselves to be the "smart people who have shown up" (like Duranske) being utterly unable to see what's really going on under the rug and behind the scenes since so much of it takes place actually outside of Second Life -- this e-gold Internet scheme, that re-fi of a person's condo -- this poor kid who used his mom's credit card to run up a gambling debt of $10,000 US, and who pleads and screams on the casino floor for help -- but in fact the people who took his mom's money can't be sure he isn't a 35-year-old hardened card sharp and gambling addict just telling a yarn to try to get his gambling debts back.

I continue to maintain that when Lindens seize and release accounts, they aren't pronouncing on guilt or exonerating from guilt. They are limiting their own liability for litigation, and we can't be confused about that. The Lindens print text on their forums that is very clear that completely absolves them of responsibility for disputes with other residents -- and that includes financial claims on pyramid schemes or crashing stock markets.

All that separates a Second Life Ponzi scheme, as Ginko's is said to be, from a real-life bank with its sharp practices of holding checks for 5 days, or whalloping with $39 electronic bounce fees or simply losing deposits is...a more reputable stock investment practice and FDIC insurance. That's why the AVIX-renamed-SL Capital Markets has seized on this idea -- beloved of the American people -- of claiming there is now "insurance" -- though it will only pay some of your money back.

PONZI OR GRAMEEN?

Putting your money into a pixelated online object hooked up to an anonymous avatar is about as risky as putting it in under a park bench in Central Park -- it could be gone by morning. And yet...it has worked better than people thought, in this "fastest growing economy of the world" precisely because of the fast rate of growth and the incredible volume of Lindens. There *are* usually enough Lindens to pay withdrawals, offer high interest -- and keep it going for years! People like Benjamin Duranske quick to scream "Ponzi" are completely -- witlessly -- neglecting to notice that the RL original Charles Ponzi started and tanked and was in jail in a mere six months from December 1920 to the summer of 1921, even in a world without the Internet. Ginkos, however, has lasted for more than 3 years. That simply has to be *explained* and not merely screamed at witlessly.

Are we witnessing a new kind of bank, a new kind of sharing and adding value? I think we need to keep an open mind about this when our models from the 19th and 20th centuries, when Ponzi reigned, are outdated, given the speed and volume involved -- as well as the curious longevity of things in virtual worlds -- and the curious factor of micropayments, where many thousands of people are content to put in only $500 Lindens to a Ginko's each week, make a buck or two interest, and take it out only every sixty days or something to buy themselves a new skin. The ability of people to save -- like their ability to work hard -- is actually impressive in a world which is supposed to be all about the temporal and the hedonistic.

GET THE FACTS STRAIGHT ON SL ECONOMIC RULES

I do wish we could get some very basic concepts about the economy down straight, so that RL media and various self-important bloggers would stop incorrectly portraying how it works.

1. The sinks do not equal the sources, and the Lindens make no attempt -- at least not now -- to balance sinks and sources.

2. The sinks like upload fees, group fees, auction buys, are not coming in as revenue to LL -- they are sinks to drain out excess Lindens.

3. The money that Supply Linden sells is not taken from income into the sinks -- they are truly sinks -- but are printed and released for sale at a profit to LL. More or less are sold with an eye to only one factor: the rate of the Linden versus the dollar, i.e. keeping it at around 266/$1.00.

4. There is not an effort to balance the economy's demands and supplies and run it truly as an integral, sealed economy like some kind of Central Bank; the fatal flaw of Second Life comes from the fact that the Central Bank -- Linden Lab -- cannot think only of the good of the economy, they must think ultimately only of the good of their business. So they are highly motivated to a) sell Lindens out of thin air to the extent possible for revenue b) charge fees as high as they can get the traffic to bear; c) hold the float from the cashout requests and invest it in a money market as long as possible (they deny that they do this, but we don't believe it); d) keep the price of the Linden versus the dollar low, so that incoming people have that feeling of getting a whole thousand dollars to spend luxuriously for only $3.70 US, and LL gets lots of new happy customers to show numbers to IPO with; and e) keep printing land and glutting the market to keep prices artificially low so that Linden Lab both has revenue and lots of happy new customers to IPO with, keeping them in cheap land.

5. The sources that the Lindens put into the economy are merely sales of their currency for a higher price, i.e. $9.95 monthly subscription gives you $400 Lindens plus 512 m2 of tier (not land -- tier).

6. Lindens keep printing land, again, not in an objective effort only to physically house a booming population, but in another effort, which is to garner revenue for their bottom line. Lindens need to sell land and get tier to make up 80 percent of their company's revenue. So they are like one of those old state capitalist so-called socialist societies of the Soviet era, where the chiefs of state found it very easy to run the country like "Trashcanistan, Inc." because it was clear that they had to take care of themselves and their family first, then run the rest of the economy with what was left over. Second Life is not a democracy, and not liberal, and not enlightened; it is a sultanate, in the truest sense of the word, where the sultan first feeds his palace and his harem and his foreign adventures, then pays for the rest of the country.

7. This fellow talking about the heading of the Linden economy to disaster that is the talk of all the blogs now may have it wrong, simply because he has some of the facts wrong, but in general, he's unwittingly making the point made for ages by Castronova and others about "MUDflation" -- static games with sealed economies tend toward entropy and end up inflating and dying, because either there isn't enough turnover in the economy and innovation, or gold-farming starts and the currency deflates and people get tiered of it.

Beller predicts a real slump, or even crash, as less people are willing to keep making and selling stuff, and as more people try to cash out Lindens that the Lindens won't wish to cash out any more, as they will have far less new customers to "make deposits" or buy Lindens from them. Hey, is this sounding like a much more giant version of a Ponzi? When does a New-Age Better-World concept for adding value and empowering people, especially women and those in the Third World, to create and trade, turn from a marvel to...a Ponzi? You tell me. My own instinct is that in time, the Lindens will get rid of Lindens and the LindEx and just tell everyone to run their own PayPal accounts, and let everybody scream at Paypal for delays, problems, failures to accept accounts in certain countries, etc. etc. Linden Lab is all about delegating the pain that way.

CASINOS BAILING?

So...is this already happening? Are casinos cashing out and sinking the ship?

This is a story you have to tune into daily. The facile RL-media sort of wire service story that tunes in once and leaves it for 30 days won't do; the smug and triumphant blog post gotcha won't do either; this is a 5,000 word New Yorker story. Yes, people immediately put islands up for sale in panic and some sold for $1450 instead of $1695. Others quickly converted their islands or mainland sims. A number of mainland casino owners seemed to have seen the writing on the wall very early. Moonshine Herbst, for example, the casino king of Second Life from the earliest days, who also made a fortune in rental box usury, appears to have figured out as soon as casino ads were banned that it would be a very good idea to get out of the business.

I see some casino neighbours selling low, putting up "police state" protest signs. I had one tenant today who had run a store in Ravenglass for more than a year, pick up stakes and write to me today that he was selling everything he had in Second Life, rolling up his business, and quitting in protest against the casino bans, even though he didn't appear to be a casino owner himself, but created art and furniture. Another long-term tenant left simply because there is more competition from foreigners (non-Americans), it is very hard to get attention and visibility for stores selling sort of mid-tier stuff that many people imitate or do better. The easy life of the earlier adapters who could put out tables made out of crates may be over, at least, at the volume it was once at (I believe there is always a market for cheap and even tacky stuff made by new people to sell to other new people just as in RL).

The LindEx seems to have dropped about a point on average (265 to 266) in value against the dollar, and some days even closes as low as 277, with big cashouts, I guess (or tier bills coming due?). What seems of greater concern is drop in overall volume -- and that's in part to very poor performance though the last few patches significantly reducing log-on stability.

WHO GETS TO ANALYZE THE WORLD?

While "caveat emptor" applies, as always, some Latin phrase that means "those who are watching shouldn't make premature judgements" is also in order. Erm...Ars Longa, Secunda Vita Breva? That should do!

Robert Bloomfield has an interesting post on TN which has the usual passel of angry beavers like dmt and Kami Harbinger answering -- people whose hateful posts never get them moderated or banned even as someone like me who pushes back against their hateful ideologies *is* banned.

Basically, they invoke Snowcrashian ethics and wish the people who put money into games or worlds to lose big -- because they hate the rich; the rich should be eaten alive. Except, there are no real rich people in these places, because real rich people don't waste time and money on poor returns like games. So then we hear how the welfare "cheats" and "children" (I suppose the disabled or the partly-employed or the independently sustained but not wealthy fit in here, too) should be balanced against those "who work for a living" (!), we understand why...we can't leave games and worlds to horrible people like this. Nobody at TN stands up to this; Richard Bartle, God bless him, is as oblivous as ever...

Robert concludes that it's premature to write off the SL economy:

My take is SL is a nascent economy which really hasn't emerged yet, in any meaningful way, and is hobbled by being controlled by a single corporation (LL). The good news is that both of these problems have remedies in *some* virtual world, though it might not be SL.

The problem here is that his concept of a Better World without Lindens will be something like, oh, Thomas Malaby and Ed Castronova and Peter Ludlow managing a self-management entity for Virtual Worlds starring...themselves...something like the way ICANN is private yet run by elites such as Joi Ito. You'd like to think these will be enlightened socialist bureaucrats; they are likely NOT to be, however, given how they hobble thought right on TN and support the banning of dissidents. I wouldn't want to leave economies to them, and by contrast, Linden Lab or even Google or Sony might look far more appetizing.

The economy will emerge when people decide to develop meaningful regulation. Nate Randall provides some advice for doing this successfully, and I very well might try. The arival of new virtual worlds with similar capitalist focus might allow SL wealth to be more portable, but it seems more likely to me that this will happen when we see compatible VWs run by different sets of owners.

People who have a lot invested in Second Life can't jump so easily to other worlds, so the old capitalist classes of SL whom people wish to lose big (even if they are a single black mom in Detroit working part-time in Wal-mart's) won't be arround to sustain that adventure into yet another new world, and if the old world treats its investors in R&D so casually as it IPOs or sells out or crashes, there may be less appetite to go do the same thing all over again on Chinese servers in HiPhi. It's symptomatic that Multiverse has no built-in real-estate model, unless a developer makes "a game of real estate" within this world of worlds. That may not be compelling. The Lindens, if they stay in business, will likely keep the lead for a long time to stay, in part because their customers with large holdings will be forced to keep paying them to stay in business themselves.

Two more observations: First, I see one important difference between SL and Amway. Two people who sell Amway don't have much ability to engage in mutually beneficial exchanges--both have the same items and skills. In contrast, two people who want to have mix work and play in SL can make one can use Lindens to exchange clothing for dancing scripts, etc.

Amway is a cult sustaining people with socializing, business mentoring, peer pressure, and the same elements can be found in SL and LL.

STUDENT HORDES TO SAVE THE ECONOMY?

Second, while everyone has been talking about the demise of gambling, which may have caused a collapse of a major bank (or pyramid scheme, depending on who you talk to), few have been talking about another major change on the horizon: hundreds of educators are going to be bringing thousands of college students into SL over the coming academic year. I seems plausible that many of these students will become active in SL's economy in a variety of roles, whether as for-profit builders or not-for-profit regulators (like I might be).

Some companies list and delist in the most rapidly growing economy in the real world, that some investors had no time to return their stock at least for a modest liquidation payment.

*Groans*. Woot! The 'Sploder awards $100 to another NPR listener! While those who drink Pathfinder's Kool-Aid may buy this concept of the hordes of kids coming in SL, those of us who have watched these universities come and go in big swathes know this about them:

1. Erm, they come and go quickly, often faster than within a semester.
2. Professors often get more bored and frustrated more faster than their students with SL (Beth Noveck, Democracy Island?)
3. The islands are paid for by the schools; the allowances to have fun in SL aren't paid for by anything but RL kid labour or parents, and those are limited in their revenue generation.
4. The demographic of young 18-24s in SL is large, but ever-shifting. Of all things, I find Facebook, Sims 2 (yes!), or hey, real-life beer and real-life sex with real-life dates are simply more compelling than SL.
5. The closed natures of some of the schools, and their likely ban on student commercial/non-entertainment activity while in school is likely to dampen the enthusiasm.

What will all the educators/students by? Uhmmmmm AngryBeth's not-really-working-so-well whiteboard? Modern furniture at Barnesworth's or Fade Languish's for a budget of $4000? The theory that thousands of college kids can sustain the Woolworth's, the White Tower's, etc in a little village is a touching one, but so far, it is not backed by metrics. The Lindens could tell us this; they aren't talking.

Again. Robert, we don't need non-for-profit regulators. Don't confuse your need for a school class simulation exercise with a desire to rule our world where real people live who did not elect or appoint you and have no viable way of controlling your actions, especially when you can invoke budgets and Ivy League names. This is unjust; it's wrong.

Comments

[Benjamin Duranske]

FYI - to keep the record clear, context of "smart people" comment is much narrower than Prokofy casts it:

"Ginko Financial, was supposed to buy one of Second Life’s stock exchanges, AVIX, using money from an IPO that was to be held on, you guessed it, AVIX. It didn’t happen.

Why not? Because lot of smart people who understand finance, law, and ethics showed up to explain why that wasn’t going to work and ask some very hard questions."

Full post can be found here:

http://virtuallyblind.com/2007/07/31/ginko-buying-avix/

[Economic Mip]

I would love a fairy tale ending for Ginko, something along the lines of "well we invested in this Club Penguin thing, but couldn't tell you until Disney forked over our millions."

OR

"Ginko is essentially a mix between a micro-lender and a loan shark, we made small loans in Brazil and averaged huge returns."

Sadly, I do not think this will happen.

[Benjamin Duranske]

Dead right, Economic. Prokofy doesn't believe I give a crap, but I've actually spent an unholy ton of time talking to people attempting to withdraw over the last week, and it just flat-out sucks. People who read (and especially write) blogs think everyone reads them so the people all ought to know by now. They really don't. There are people who are clearly in RL tears at the ATM once an hour.

Here's one from the Ginko forums, titled "i don't understand"

-----------------------

"How can they be out of money... I would think that someone who have thousands of customers would have the money for withdrawl... I only have 2,500 I put in earlier today to keep myself from using the money and now I can't withdraw it when I "NEED" it I'm put in a Queue for what might be months for something I thought I would have today... If I loose my home I'm going to pitch a fit because they have NO warnings on this at their machines not even a Yes do youw ant to desposite since we have this problem thing."

---------------------

I'd *love* to be wrong here.

I'm not.

And given that Ginko is keeping deposits open, I'm rapidly losing my previous belief that they were just misguided optimistic idiots who thought better of their financial skills than warranted. At this point -- with every dollar deposited at a promised interest rate of .10% daily going not to investments but DIRECTLY into the pocket of guy at the top of the queue -- I cannot fathom a level of stupidity high enough to fail to see the illegality.

As for the meta-point above demanding an explanation for the longevity (2 years, 5 months by my math), it's simple. They lasted this long because SL has had a rapidly expanding user base and a high turnover rate, like Prokofy said. But so what? The fact that it was a *successful* ponzi scheme due to the constant influx of disposable cash doesn't make it any less illegal, or any less certain to end in ruin eventually.

Which it has.

So here's a counter-question: should landowners who have Ginko ATMs remove them to prevent their tenants from having what happened to the poster above happen to them? I say they should, as long as Ginko leaves deposits open.

[Robert Bloomfield/Beyers Sellers]

I'm glad you found my post interesting, Prokofy. You may very well be right that students won't have any significant positive impact on SL's economy. However, I have been astonished at the number of college instructors who plan to take their students into the world. You have a much better historical context for this than I do, but I imagine that this Fall will see a bigger student influx than prior years, just because (it seems) there will be so many more of them.

As far as my plans for "regulating" SL markets, I think regulation is really not the right word for what I plan to do (although I admit I have used it frequently). Instead, my hope is to begin by studying SL's economy (with or without students, not sure yet) and publicizing systematic analyses of the facts on the ground. Once residents have a better understanding of the world they are living in, businesses will be able to construct more effective practices--and consumers and investors can demand those practices.

The information-sharing agreement I have brokered with ISE and SL Capital Exchange is a first step, which I think provides a pretty good example of what I hope to do.

I post about the agreement on Nick Wilson's Metaversed.com, here:

http://metaversed.com/robert-bloomfield/blog/06-aug-2007/stock-exchanges-provide-data-independent-analysis

[perestroika zelmanov]

Prok, what about the potential for money laundering where some RL organizations covertly agree to a loss in these markets in order to clean money or move cash over borders?

Is it scary that Intibbler now supports the PN and gives Ginko private security and land?

[Prokofy Neva]

Yes, it's quite possible RL money-laundering goes on, but the Lindens are always burbling about how they never see transactions like that. I'm not sure they can tell, given the ability to spread transactions over time and over multiple avatars.

I find Intlibber scary on his own, and adding the PN is scary -- and if he now also gives Ginko security, I suppose that's even triple-scary, but I don't know that he does that. I take it for granted that all these financial operations are intertwined, and only appear to be warring sometimes but it's all cats under the rug.

[perestroika Zelmanov]

I encourage folks to visit Ancapistan and look around, particularly Neo, and Ginko Financial.

[Prokofy Neva]

I've completely discounted your theory of the student invasion, Robert, it's just not sustained. Students don't have money and they come and go very rapidly, often getting very bored with SL. There have been many groups that came and went already numerous times. Overall, it's a growing sector and it may have a role to play but it's not some big replacement of the casinos as a revenue generator for anything other than Linden Lab.

You have no authority to regulate the markets, Robert, and I can only keep burning that in as hard as a I can. Of course it's your right to comment on and analyze things, and suggest best practices. But you are merely a Guy Named Robert even if you are a Guy Named Robert in Ithaca. I'm not interested in Mr. Robert's Ithaca as my government.

As I posted on Metaversed, the sooner you share that information rather than hoarding it as somehow privy due to your expertise, the more credible you will be.

[Benjamin Ahundred]

Didn't I read somewhere that these guys have a way of counterfeiting millions of $Ls? That should help keep them afloat.

Just because its illegal doesn't mean they can't do it. Right?

Money is God and God can do anything he wants. If you have more money than anybody else, you can do anything you want. And since God can do no wrong - Money can do no wrong, so anything you do with it is Good. Right?

I mean, us simple-minded mortals just don't see the "Big Picture". What may seem "wrong" in our eyes actually has a higher purpose of good.

Our faith in the almighty $ sustains us through these periods of doubt and shall lead us through the darkness to the promised land! "Yea, though I walk through the valley of the shadow of doubt, I fear no evil..."

Without faith in the almighty $, what have you got? Nothing. An empty life of give and take without end.

So rejoice, dear friends, rejoice! For the day cometh when all your dreams will be realized! Each and every one of us will be the richest person ever, and the non-believers will tremble in our wake! Our faith sustaineth us! Amen! Amen! Amen!

Brother Chet will now pass the plate, please give generously dear friends, dig deep to show your faith! Amen!

[Desmond Shang]

What I've found (for what little my experiences are worth, Caledon is only about 0.2% of the grid) - the student population is around in droves in the summer, and largely vanishes by October.

Oddly, even though they don't have the resources their parents have, they seem to spend far more money per-capita or whatever that's called.

Seems they get quite busy with classes and... each other. :)

[Breckenridge]

How can I take an article about finance and currency seriously, when you refer to the German Mark. The Deutschmark hasn't been currency for over 7 years....

[Prokofy Neva]

Sorry you're such a picky fussbudget, Breckenridge, and hope you got your gloating gotcha fix for the day.

As I travel to Europe frequently, I'm well aware that the German mark isn't used anymore, and there is now the Euro. But it's merely force of habit, from speaking of the strong German mark for most of my lifetime. BTW, marks were accepted as payment up until 2002, so you're in error about the "7 years".

I don't claim to be an economic expert whatsoever; I wrote about what I know from experience in Second Life. I don't see you addressing the substance of this article whatsoever; perhaps because you're not very smart and have nothing to say.

That usually tends to be the case with people who pounce on errors like this just to show off.

BTW, to post here, you need a first and second SL name.

[A Concerned Reader]

"Are we witnessing a new kind of bank, a new kind of sharing and adding value? I think we need to keep an open mind about this when our models from the 19th and 20th centuries, when Ponzi reigned, are outdated, given the speed and volume involved"

Haha, yeah a new kind of bank that can earn 40% returns on micro-deposits in a currency where inflation is minimal. That would be quite an accomplishment indeed. Those fellows should go work for Goldman Sachs and f--- taking $2.75 deposits from 12 year-olds.

I don't know much about SL but it's interesting that it sounds like the SL market collapsed around the same time that the RL markets took a sharp tumble. Anybody out there doing the explaining?

[Prokofy Neva]

Concerned Reader, you must have a RL or SL name to post here.

In fact, this accomplishment, as much as anyone would like to scorn it, ran for 3 years. That's a long run for a Ponzi. I think I'd like more information about all of this, and not from biased parties trying to play prosecutor to inflate their sorry egos.

[Prokofy Neva]

I love that song, katy, I have to hear the tune that goes with it.

Thanks for coming and commenting here. I know you like to stay out of SL dramas and flame wars and it's good to hear a voice of seasoned common sense here among all these shrill egotistical wannabees.