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1 SEK = 0.001 Gold 
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Joined: 29 Mar 2009, 22:07
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Post 1 SEK = 0.001 Gold
I have sent a text message to Crazyfrog11 and told him to remove this SEK offer on the monetary market until I have more information on this topic.

This topic is very important and since I am not especially talented in eRepublik Economic part. I would like you to explain the advantages and disadvantages of the "new" value. Preferably as simple as possible because I am certainly not the only one that not so good with eRepublik Economics. In addition, I prefer that you bring your thoughts on how the various options affect Sweden and our citizens in the long term.

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20 Jun 2011, 01:48
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Joined: 12 Aug 2008, 16:04
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Post Re: 1 SEK = 0.001 Gold
Budet är bort plockat. Nu drar jag och jobbar, så ni får klara er själva under dagen =)

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20 Jun 2011, 06:20
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Joined: 25 Apr 2010, 16:47
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Post Re: 1 SEK = 0.001 Gold
In short term, what this means is that our country treasury decrease in value. It will also become even more difficult to sell SEK for gold. Our chances of getting more gold to Riksbanken through the money market are thus quite slim.

The pros and cons of having a low value on currency:

+ Few players will want to buy gold from MM, due to the price being >1001 SEK/gold. This may improve our chances of getting more gold offers on the market.

+ The limit is met; our currency can't go below 1 SEK = 0.001 due to decimal limitations.

+ Markets with low currency consumption tend to draw less attention from foreign export companies.

+ Land, Normal Storage, Grain farms, Fruit Orchards, Cattle Farms, Iron Mines, Oil Rigs and Saltpeter Mines become less expensive for those who needs to buy SEK (mainly newbies).

- If we ever need to print SEK (unlikely) at this level, it will be more expensive than buying from the market (0.005g/SEK).

- Once we've reached "rock bottom" and the market has adjusted itself to the change, the price on gold will keep increasing non-stop until there are enough players willing to sell their gold. Since SEK can't be sold for less than 0.001g, the spread will eventually become extreme. Spreaders will still see our MM as a high-risk market though, but pretty much every company owner who sells his products on our market will increase the spread.

- The value of SEK gives a hint of how healthy our economy is. Every currency has suffered from the changes, since gold is still in high-demand. But countries with many new players (read: large population) is more likely to tackle these problems better since this part of their population is more likely to buy currency-priced companies, more land and more storage and thus consume more currency than they may earn through their own labor. To sum things up; having a 0.001 currency (may) mean that you have very few (if any) active, new players.

- Congressmen will be flooded with citizen application requests. Players from other countries will likely try to take advantage of the low prices on primarily storage and land. This may, however, be turned into something good... in case this group of players decides to buy SEK through MM. But considering the estimated size of foreign SEK reserves, I'd say that it would primarily be old(ish) players trying to make use of their now worthless pile of SEK...

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20 Jun 2011, 10:07
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Joined: 12 Dec 2010, 13:04
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Post Re: 1 SEK = 0.001 Gold
I agree with Valnad on his points..

Also, this will probably create a larger gap between the really rich (=those who owns Q5 companies) and the poor ones (=the rest)..
The SEK will be very cheap compared to Gold, thus the gold-price of buying RM-companies for SEK will be very low (as Valnad pointed out)..
This will (probably, not guaranteed) mean that the number of RM-companies will rise, thus creating a flood of RM's..
Some of this flood will be exported, but my assumption is that it will also drive down the price on RM in Sweden, meaning that the Q5-owners gets cheaper RM's = bigger profits for them..
At the same time, the number of Q5-companies out there will be very limited due to the high price of Gold..
The spread will be enormous, as Valnad pointed out, and thus it will be very expensive to get your hands on the Gold to buy Q5 companies..

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20 Jun 2011, 13:00

Joined: 20 Jan 2011, 12:44
Posts: 806
Post Re: 1 SEK = 0.001 Gold
What was done yesterday, will have a very bad effect for some time.
1500000 SEK was pumped into the market for the lowest possible price.

Every time one of those buyers, buy gold from the Swedish market now, and that price is less than 1000 SEK per gold, they make money.

This means, that more than 1500 gold has to be bought up by these speculators, before the gold prices will again be allowed to flow naturally under the free market.

The actions done yesterday, may have very serious effects for a very long time. Tampering with the free market is a very dangerous thing.

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20 Jun 2011, 13:44
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Joined: 25 Apr 2010, 16:47
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Post Re: 1 SEK = 0.001 Gold
Buying a Q5 company now is a matter of speding IRL cash or not. I honestly can't see a way for a new player to get a company worth at least 370g without buying gold.

The RM market might be affectes, yes, but I disagree that it's because of rich players starting new companies. If you've got a Q5 company, regardless of whether it's a tank or food company, you will have the means to aim for complete self-sufficiency. It's just a matter of days time. Now with the new health limit rules, you may work in lots and lots of companies on a daily basis. Thus it's safe to assume that any serious company manager would opt to buy 3 x Cattle Farms or Rubber Plantations per every Q5 company they've got.

Why I think the RM market might explode is the old 10g companies from before the new raw materials came in place. For example: what will happen when guys like me, who own a bunch of 10g-RM companies, can dissolve for 5g a piece and then sell those 5g for at the very least 5000 SEK? We're likely to dissolve, cash in, sell some gold and build tier 4 companies instead.

In a short term perspective, this might actually prevent the gold market from collapsing... but that depends on how greedy the GM's are. I, for one, won't sell gold in a time when I expect the value to increase even more... and I know that I'm not the only one thinking this way.

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20 Jun 2011, 14:07
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Joined: 25 Apr 2010, 16:47
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Post Re: 1 SEK = 0.001 Gold
Flitwick wrote:
What was done yesterday, will have a very bad effect for some time.
1500000 SEK was pumped into the market for the lowest possible price.

Every time one of those buyers, buy gold from the Swedish market now, and that price is less than 1000 SEK per gold, they make money.

This means, that more than 1500 gold has to be bought up by these speculators, before the gold prices will again be allowed to flow naturally under the free market.

The actions done yesterday, may have very serious effects for a very long time. Tampering with the free market is a very dangerous thing.




Whoooah... hold on there just a sec.

You're saying that RB put up an offer and sold 100k for 100 gold? I wasn't aware of this, but considering the title of this topic I guess I should've figured it out.

If so, why? I can't see why RB needs more gold? Our expenses in gold should be 0.

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20 Jun 2011, 14:11
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Joined: 17 Apr 2008, 17:08
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Post Re: 1 SEK = 0.001 Gold
The RB sold roughly 1,5 million SEK at the rate 1 SEK = 0.001 G yesterday. The only explanation to why have so far been to "make things cheaper".

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20 Jun 2011, 14:17

Joined: 20 Jan 2011, 12:44
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Post Re: 1 SEK = 0.001 Gold
Our Minister of Finance found it as a clever plan to first buy up all gold that was sold for less than 1000 SEK per gold.
Then he put 1.5 mio SEK into the market, selling it for 0.001 gold per SEK.
These 1.5 mio has been bought, resulting in what I wrote above.

A solution could be, to take 1667 gold and sell it on the market for 900 SEK per gold.
When those 1667 gold is sold, we are back to where we were, before the MoF did as he did yesterday.
It will be, though, with a loss of 10%. But it will be the only thing that will fast make it possible to have a free MM in eSweden again.

What was done yesterday was stupid and reckless and it was not thought through at all.
But, I would like the MoF to present his calculations leading him to do what he did. And if no calculations were ever made, then I would like him to say this. Just to get everything clear.

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20 Jun 2011, 14:20
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Joined: 25 Apr 2010, 16:47
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Post Re: 1 SEK = 0.001 Gold
With the risk of repeating myself, I would like to know what RB needs gold for? Of course, gold is always nice to have but I can't see that we have any expenses in gold and thus it would indeed seem... odd... to jeopardize the entire MM.

I've done a similar thing myself back in the days when I was MoF under St00r, but back then our intentions were to INCREASE the value of SEK. Unfortunately, too many who had promised their support quickly saw an opportunity to score some easy profits and the attempt didn't last more than a few days. I took the blame for it, although it was a project that involved quite many players, but I also learned how pointless it is to try and offset the MM balance. We've had a floating currency peg for months and months... I just fail to see the reason why we would want to dope it now.

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20 Jun 2011, 14:41
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