Linden Dollar Strengthening

Saturday, September 11, 2010

For the first time in over three months, the Linden Dollar showed signs of strength, as the current offer price for sell orders ticked down one notch, from 266 to 265. This is the first real good news I've seen on the Second Life economy.

Ram Linden has posted an "Economic Spotlight" on June's Lindex meltdown. The official explanation is that when they merged people's XStreet and Second Life accounts, the extra Linden Dollars swamped the economy. Nobody seems to be especially convinced by that. I have my own suspicions, which I hope to be able to write up soon.

One other thing I'd like to comment on. In his blog post, Ram writes: "...we are committed to allowing the economy to fluctuate based on its own market forces." I'm sorry, but that's an outright lie. For almost four years, Linden Lab kept the price of the Linden Dollar artificially low, by selling massive quantities of their own currency on the Lindex through the Supply Linden account. The value never increased beyond L$259/US$. If the economy had truly been allowed to "fluctuate based on its own market forces," the L$ would be worth much more today, and content creators would have been compensated much more for their efforts. Instead, by artificially clamping down on the Second Life economy, Linden Lab was able to pad their income by millions of dollars a month.



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