Inflation observations/strategies

[Absolutely Virtue]

You should not post in this thread if:

a) You think the Christmas FFXI hyperinflation was caused by gilbuyers
b) You don't know what hyperinflation means
c) You don't have an understanding of markets, supply and demand, or macroeconomics in general

I've seen people talking about this in game, but a quick search of "inflation" only turned up one mention in the last few months on BG. None of what I am about to say is rocket science, but I was wondering if other people were noticing it as well. I am sure you have noticed the price of shihei skyrocketing.

On Sylph, H.Q Buffalo Horns sell for 3k. They're used to pop Audumbla, who drops an Audumbla hide 100% of the time. The hide sells for 100k. The fight is trivially easy for a tank and a healer, and takes just a few minutes. If people have enough money to drop 100k rather than spend ten minutes farming something that would essentially be free, it leads me to believe the economy is out of whack.

The obvious culprit is Abyssea. Since all of the gear from Abyssea is essentially free these days, people are less likely to spend gil for gear and therefore probably have a lot more saved up. But I think there is more at work here. Abyssea contains almost no gil sinks. No chocobos, no warp NPCs that cost gil, no trips on airships. While 200 or 300g per microtransaction might seem trivial, the cumulative effect of all of those transactions is the removal of a large amount of gil from the economy. Since usage of those sinks has presumably gone down significantly, there is a lot more gil to go around.

There is also more gil being created. I NPC all sorts of shit from exp/cruor parties. And the removal of the level cap has led to a lot of people doing the original missions, which have big gil rewards. Finally, I have heard of people spending their cruor on gear which they turn around and NPC.

I'm not sure how SE is going to be able to fix this. Unless they have plans to introduce gil sinks to Abyssea (not sure how they'd do that), or make new content gil sinks, we're likely headed back to the days of paying 20k/stack for crystals.

Anybody else noticing this? And anyone else implementing any hedging strategies? I have been putting it off, but I might soon. I took a bath during the last inflation, and I don't want to have to deal with that shit again.

[Mojo]

I don't think it's inflation so much as it's a real economy. Killing anything in Abyssea requires an investment of time and effort. Audumbla certainly takes an investment of time to kill which increases substantially if you have mediocre gear and atma. Many of the groups I see killing it take a while (relatively speaking.) Multiply this by each member in their group and you end up with a decent investment of man hours. 100k isn't really that outlandish to me at all considering the time investment required.

While there aren't many gil syncs inside of Abyssea, you should also consider that the Auction House is being utilized far more than it ever has been in the history of the game. As long as the AH continues to be the primary source of transactions, inflation will be kept in check with AH fees.

It seems to be like the economy is in the best state that's it's ever been. If you want to make gil, you can somewhat easily and there don't seem to be any absurdly overpriced items around anymore. I don't think there is any reason to fear hyper inflation unless another exploit comes along that enables it.

[Fievel]

Minor nitpick, the hide isn't a 100% drop from Audumbla.

I've always been under the impression that the market is so shaky due to the updates adding so much gear lately, not many people spending gil on gear for the simple fact that something better, and free, will be added in a month or so. So then they have tons of extra gil from not buying said gear and can spend it on silly things like pops.

[nsx]

Hides aren't 100% off that nm.
Also its not a 10 min fight solo if you have to wait around for 20 other people trying to pop said NM or get lucky and pop first, but I digress...

There is definately more gil being created via npc'ing now than before, as well as little being taken out of circulation (less dynamis, less npc porting, chocos, etc). Aside from the rusty cap era of course. Which was also the time when light crystals were 20k/stack. Never saw huge crystal prices aside from light really. Todays high prices are a product of supply/demand due to xp being rare outside of abyssea. Crystal prices seem to vary alot based on the profitable crafting recipes they're needed for.

Inflation is happening, but it seems to be a more steady rise than the spike of hyperinflation that previously happened. Though it will pick up more speed the longer time goes on if unchecked.

[Byrthnoth]

There is incredibly severe inflation of consumables and pop items right now, for a variety of reasons:

1) Gil demand within the system is down. In a more economics-y sense, the ratio of gil saved to gil earned for high income players is lower right now than it has ever been, or would be if there was anything to spend it on.
A - No individuals are putting a lot of effort into hoarding gil (and subsequently competing and lowering prices of the consumables we still care about) because relics and mythics are not very desirable at the moment.
B - In general, people don't hesitate to "overpay" because there's nothing to save for. Dusk +1 are a tier 1 synth. Synergy items are expensive but disproportionately so to the amount of effort required to make them. (Al. Harness +1 is a holdover until Loki's on every job that can wear it and it still goes for 6mil, etc.)

2) Gil supply from outside the system is up. No matter how you look at it, Abyssea shits gil. If half the cruor people earned was turned into gil, the economy would be so flooded with gil that the Christmas inflation would look like nothing.

3) Gil demand from outside the system is down.
A - People don't do Dynamis/Einherjar and remove gil from the system that way.
B - Crafting is dead, so no one is removing gil from circulation at the guild vendors.
C - As an extension of point B, nothing sold from vendors is worthwhile anymore.


I've considered how to maximize my hoarding, and there's only one place to put your gil that's a solid short-term bet. Alexandrite. It's 5k each on my server at the moment, and the dynamics of Alexandrite supply/demand is very unlikely to change with this coming patch.

Investing in other currency right now is a very risky move, in my opinion. You're either screwed out of almost all your gil when the market for it is flooded and SE fails to make relics desirable, or you make a ton of money when they dramatically lower the currency drop rate and put relics back on top.


If SE had a serious interest in controlling inflation, it would be as easy as putting a vendor in the game that followed guild-like rules, selling Alexandrite and Dynamis currency. Stock it so there's maybe 600 Dynamis currency of each type released every rl day with a ceiling price of 10k each. Maybe 800 Alexandrite with a ceiling price of 5k each. You'd remove a max of 22mil per rl day with that setup. That's effectively the same as removing about 9 million cruor per day. It would stabilize the economy around current levels very quickly and add a much needed additional source of Alexandrite.

[Mojo]

Nobody has the data required to truly say how much gil is going in/out of the economy, so I'd be careful with any kind of blanket statements. Dynamis, for instance. I've spend 2M on hourglasses in the last few weeks and have taken at most 4 people into any zone. Much fewer people are doing Dynamis, sure, but the trend is certainly much smaller groups going inside. Hourglass sales might have even gone up due to this. I also spend millions per week on AH items, the fees add up fast. Sisyphus Fragments are about 190k on my server and 12 sell per day. The AH fee for this item is 1% + 50 gil => around 24k/day goes out of the economy on this item alone. It might not seem like much, but this is only one of the vastly larger number of items sold on the AH every day.

[Absolutely Virtue]

Sorry, botched the drop % on the hide. Not sure what I was thinking. Derp.

I hadn't even thought about Dynamis, and what a gil sink hourglasses were. But I believe SE stated the new system would require /everyone/ who entered to buy a lifetime pass. I wonder how that balances out in terms of gil in/gil out compared to the hourglass. Presumably a lot more people are about to start doing Dynamis (I think SE is banking on that, anyway). Will be curious to see what happens to the price of currency.

Another thing I had forgotten- mog sacks. I bet just about everyone bought one. That was a lot of gil going out. Same thing with the claim slips, to a lesser extent though.

I had considered investing in the Alex, because of the scarcity/stability things you mention. With the way consumables are going up, stacks of shihei bags might not be a bad strat, either.

I like your currency vendor idea, but dislike the botter aspect. When I was leveling crafts it would drive me crazy to see the bots log in right before the guild opened every day and buy everything before I could even click through the menus. Your idea would increase supply, but it wouldn't reward the average player too much.

[Absolutely Virtue]

Mojo- I hope you realize that if you're spending millions on the AH every week, you are far, far from the average player. Therefore your anecdotal observations aren't very good predictors of the economy.

And I just outright disagree with your assumption that the AH is busier than ever. Sure, the pop item section is super busy. But the others are dead. You used to have to buy new gear every couple of levels. Now you burn through 15 in one XP session. No need to buy gear at all. And I can't even remember the last time I saw someone use food in Abyssea. Finally, I was under the impression that SE was combining the AHs because they're all dead these days. Could be wrong about that, though.

[Mojo]

I wouldn't say that the other sections are dead. Lots of misc 500k+ gear sells constantly, and good attack food is often sold out on Fenrir. Again, I'm not saying that it is perfectly kept in check by the AH at this point, just pointing out that any anecdotal claim is mostly arbitrary unless you have some data to support it. It might be interesting to see about how much gil has gone out of the economy due to AH fees in say the last week using FFXIAH, although I wouldn't even know where to start with that.

The only consumable that I've seen rise drastically is Shihei (from 4k/D > 10k/D), but this could perhaps be explained by the fact that ninja is immensely more popular than it once was. Pop items are right around what I think is fair for them, and they go up and down.

[Byrthnoth]

It is hard to guess how many glasses are bought these days, but the motivation for continued Dynamis runs is way down. The only remaining motivation is to get gil, but gil isn't very useful unless you're going for a relic or mythic. You can get all the AF2 from a zone in a single run these days. I did it last night in Dynamis-Bastok with a shout group, and made 30k NPCing bullshit on top of the payout for 650 currency. I'd bet some people had full inventory, but that's still going to be at least a 100k rebate on your glass in terms of gil in/gil out of the system.

The problem is less about the current levels of inflation and more about the potential for an inflation explosion. While 100k for a stack of shihei bags is somewhat laughable, it's nothing compared to what would happen if people had a legitimate reason to want gil again. Most people don't even bother to convert their cruor to gil.

I guess this is the part where I should try to estimate how much cruor comes into the system on a daily basis right now.
1) There are regularly at least three groups of 18 retards killing monsters for 200 cruor/kill average in a Heroes zone.
2) They suck, so lets say they kill 50 monsters per hour (10 Ops) and are rewarded with maybe 15k cruor between Op rewards (x10) and blue chests (x5)
3) 25000 cruor/hour for three groups of 18 retards = 1.35 million cruor per hour
4) If they had a reason to want gil, and turned it all into gil, 1.35 million cruor per hour = ~3.4 million gil/hour

Lets cut it back to 2 million gil per hour arbitrarily. Do you really think that 2 million gil per hour leaves the system? The potential for inflation right now is gigantic and most people aren't even intentionally farming cruor for gil.



Edit: Also, it's hard to argue that somehow inflation hasn't happened, Mojo. Here are two questions that should make that clear:
1) What is the best gil/hour you could reliably make at level 75 solo or lowman?
2) What is the best gil/hour you could make now at 90 with a similar number of people?

For me, the answer is something like
1) Something north of 100k/hour
2) Something north of 1 mil per hour.

An equal amount of gil is worth fewer hours of effort than before, so gil's value has decreased.

[Mojo]

You're making a large assumption that people will actually convert their cruor to gil. Most of it goes to brews or what have you. I'd say I make far more cruor than the average player and I've never once tried to convert any of it to gil. 200 cruor is also quite a bit to get from a single mob, the most I see regularly is like 160 or so and only after you've built lights up.

You are correct though in claiming that the potential to put gil onto the servers is higher than ever, I just don't think that it's currently occurring at rate near alarming. Even if some reason to make gil comes about that will cause some kind of inflation, I don't really see it as a problem as long as the means to make gil are accessible to everyone (which they certainly are.)

[Byrthnoth]

I agree that the mechanics (cruor conversion into gil, dominion ops, etc.) are not a troubling issue in some sense. I like very much that all of my more casual friends now get gil just for xping their jobs. However, unstable economies are not fun.

I like the idea of giving out gil basically for xping, meriting, etc., but would like it to be countered by removing gil from the system through less casual players. Hence my ancient currency vendor idea.

[Mojo]

The only economic situation that I see as harmful to players is one in which the means to obtain gil become less effective while the cost of desirable items becomes increasingly more expensive. With the ways they've been taking the game, it seems unlikely at this point. Gradual inflation for everything is actually healthy, in an economic sense.

[Lyramion]

On Sylph, H.Q Buffalo Horns sell for 3k. They're used to pop Audumbla, who drops an Audumbla hide 100% of the time. The hide sells for 100k. The fight is trivially easy for a tank and a healer, and takes just a few minutes. If people have enough money to drop 100k rather than spend ten minutes farming something that would essentially be free, it leads me to believe the economy is out of whack.

This really doesn´t have much to do with "ppl being lazy". It´s more the shout culture influencing these things. It´s about "Gather a group and everyone buys a pop, do x amount of NMs in y time." Not bothering with the small NMs beforehand helps alot, even if they are easy.


There is alot more gil being created but then again I really blame the fact that nowadays gil is more readily avaiable to everyone. I remember back in the day you had to either grind NMs, craft or chainfarm things over hours like batblood or something. With Abyssea spitting gil out more evenly, Mr Smallnoob has some gil to buy Hermes Sandals for example. They esentially doubled in price if not more.

[Tribe]

I dont see it as inflation, as people have pointed out Prices are not rising past the rate at which gil is being harder to get, Shehei going up along with making more gil per hour is just a rise in both ends of the graph, all your seeing is higher values for the same stuff.

If Vanadiel was a country and this was happening it would only be a good thing, in a sense.

The only reason it is not inflation is that there is no other currency that gil is traded with ( baring people spending actual currency which is why im assuming you feel its inlfated seeing how gil sites are down to what 9-10$ a mil now? just like when hyperinflation last happened ) The difference is now gil for all users is also as easy to get.

Either way as long as you play the game at a normal rate, and look for places to make money ( like the hide you mention ) or NPCing gold box gear and other things inflation wont catch up to you, someone who might not have played the game for a while will feel that there gil has de-valued but that is only because they were not making money at the same time.

[Absolutely Virtue]

I still think our point of view is skewed a bit more toward endgame, or people who play the game very differently than the average player. I play in a lot of pickups, and people constantly bitch about being broke. Of course, they always did that. But what I mean to say is that the average BG poster is probably very different from the typical retard. Which is not to say that a lot of you motherfuckers aren't very retarded, of course. Smiley OMG JK.

I've talked to some people who either came back recently, or re-rolled because the game is so much easier now. Depending on what job you pick, you can get crushed. Have you guys seen the price of BLM scrolls lately? There are 15 different spells on the AH for more than 100k. That's brutal if you're a noob. You're talking about millions of gil just to be able to play the job and proc grellow.

[Absolutely Virtue]

Inflation is so bad it's causing my posts to double!

[Ocara]

I don't think the costs have really changed much, just look at the prices of BLM and WHM spells in the past (AM spells, tier IV, raise III). However, new players might have a harder time making money now that making money largely involves cruor or items from abyssea, requiring at least one 90 job to make a decent income. On the flipside there is less gear to buy at endgame and less overpriced gear, meaning most gil is just sunk into one time items (scrolls), consumables (food/tools), or convenience (pop items/services). Overall it's mainly just an issue for new players, or people who really really don't try to make money.

[mdkuser]

the average BG poster is probably very different from the typical retard. .

Nope.

[Mercilessturtle]

What makes you think you are the average BG poster pchan?