[EXTRA] The Great Depression of the New World

Day 1,777, 12:28 • Published in Japan Japan • by ahava3233


Hi, ahava3233 here. Anyway, I wanted to write another article, this time about the current economic crisis (which has effectively become a depression) here in the New World. I'm going to do my best to explain my theory as to why I think it is occuring, sit tight.

As many of you may have noticed, the prices of various goods and services, in particular food and sub-Q4 Weapons have dropped dramatically in the last month or two. This is primarily due to two different forces in the economy, runaway deflation and market demand.




Runaway Deflation

Deflation is defined as an increase in the value of a unit of currency against the value of the goods and services it can buy. In practice, this means for example that if ￥1 could buy exactly 3 Q1 Food before, now it can buy even more than that. Furthermore, it also means that one unit of currency can buy more gold than it could before. This is why you're seeing an ongoing drop in the gold exchange rate right now on the monetary market. It is nearly 6 times less than what it was a few months ago (about ￥3000/Gold, now it's lower than ￥500/Gold).

Now, the reasoning for this deflation is actually pretty straightforward; it is occuring due to the fact that little new currency is being printed, creating a currency shortage. Before, as players could not buy money from plato and government minting was uneconomical, the only source of new currency was the market bot. Currency gets lost when people spend it on items with pegged prices, such as additional storage and various resource businesses. Therefore, as the bot is not running as it used to, players are spending more currency than the bot can put out, thus creating a currency shortage and making currency more valuable, which is furthermore reducing the prices of various goods and services in game as well as bringing down wages in game.




Market Demand

There is another issue that younger players that are not in the upper middle class or higher are dealing with right now, and that is general lack of demand for their products on the market. The only products that are currently of major value are higher tier weapons. The reason for this is due to the fact that the advantage of higher tier food is minimal (only requiring less storage space) and the performance of weapons by tier is exponential (more uses and more additional damage). Therefore, given low wages, there is a massive surplus of food on the market, bringing prices down on food supplies as most lower-income citizens couldn't afford to eat given old prices. Furthermore, the price of lower tier weapons is still low as it was before, although of course, higher tier weapons are still as pricey as ever as they are scarce (given they require a huge up-front investment by the manufacturer) and in high demand due to their ability to perform. The rocket factory upgrade is not helping matters either, making these products even more scarce and barely making a dent in the massive surplus of lower tier weapons.




How it Could be Fixed

There are a few ways that the admins if they desired could bring the world out of the depression, here are some ideas from me.

1. Allow players to privately buy currency with real life cash.
2. Allow governments to print money without paying a gold fee or reducing the gold fee (and bringing back private donations to the government treasury)
3. Raise the prices the market bot buys at.
4. Cause a gold shortage by raising gold prices in game (for Real-life cash) and reducing medal rewards or by encouraging players to spend gold rather than hoard it.
5. Make higher tier food have an real advantage over lower tier food (ie: limiting how many units of food a person can consume in a certain time period, not the amount of health they can heal). This would increase general spending and redistribute the wealth somewhat.
6. Allow players to take a currency award rather than gold for medals.

Once we have land and a congress, we could also mitigate the effects of the depression by increasing taxes, and therefore increasing bot prices somewhat (although the government will have to give citizens back the extra wealth in taxes).




That's all for now folks. Please vote up this article if you liked it and feel free to subscribe to my personal newspaper, Gougai/号外/Extra for more of my articles. Also feel free to leave a comment, thanks!