Ok Gil question from live letter

[Mikita]

What will prevent this from happening:

Gillionaire has 999mil gil. 900 normal players have 1 mil gil each...
[snip]
Gillionaire spends excess gil on HQ materials ensuring he maintains control of the market.

The rich get richer, the poor get poorer. Am I missing something?

I'd probably just go out and gather/farm the HQ materials I need and craft it myself.

What you outline could conceivably happen as a worst case scenario if the amount of resources of the world were frozen at ARR launch, but I don't believe that will be the case. If someone tries to monopolize the market, people can't afford it and will just make their own, then said gillionaire gets stuck with having bought a lot of inventory he can't sell.

[TocAmmanas]

I'd probably just go out and gather/farm the HQ materials I need and craft it myself.

What you outline could conceivably happen as a worst case scenario if the amount of resources of the world were frozen at ARR launch, but I don't believe that will be the case. If someone tries to monopolize the market, people can't afford it and will just make their own, then said gillionaire gets stuck with having bought a lot of inventory he can't sell.

Especially since Normal player with 200k to his name is unlikely to spend 75% of his wealth on 1 item. Markets correct themselves. They always do. Are there going to be instances of items that inflate...sure, but not to the levels that Matsume keeps spewing across all these threads. These Doom-and-Gloom people are the current day equivalent to people that hold up the cardboard signs on the street corner proclaiming the end of the world.

[Estellios]

I'd probably just go out and gather/farm the HQ materials I need and craft it myself.

What you outline could conceivably happen as a worst case scenario if the amount of resources of the world were frozen at ARR launch, but I don't believe that will be the case. If someone tries to monopolize the market, people can't afford it and will just make their own, then said gillionaire gets stuck with having bought a lot of inventory he can't sell.

That's why most of us started crafting/gathering in the first place, too!

[Alhanelem]

What will prevent this from happening:

Gillionaire has 999mil gil. 900 normal players have 1 mil gil each. Gillionaire Spends 900mil gil equally amongst each player buying up all the HQ materials in the game causing short term hyper inflation. Gillionaire now has all the HQ materials on the AH + 99 milion gil. 900 normal players now have 2 mil each. ARR launches, Gillionaire still has all the HQ materials, and now 9.9 mil gil while the 900 normal players only have 200K. Normal players now want to buy HQ crafted gear that gillionaire makes. Gillionaire sells back the now transformed HQ materials to the players he bought them from for 150K each (1.5mil pre ARR); Normal Players pay 50% more than they had sold materials for cause Gillionaire controls the market and they have no choice but to buy at his prices. Gillionaire now has 9.9mil + 900x 150K (135mil). Gillionaire spends excess gil on HQ materials ensuring he maintains control of the market.

The rich get richer, the poor get poorer. Am I missing something?

The gil cap reduction looks good on paper and in theory, but then again so did those mortgage backed securities and derivatives that caused the world wide economic crisis.

Obviously, I am imagining the worst case scenario where the rich take advantage of the poor, but show me proof that this doesn't already happen?

SO, what measures will be put into effect to prevent players from doing this? I know that the morning after the official announcement on the Live Producer Letter that literally all materia were bought off the AH on my server. What's to stop them from hoarding all the HQ darksteel/gold/mythril/cobalt/electrum ore?

New items? Increase in level cap? New recipes? New base materials?

Redenomination does not affect this situation. Your 10% of previous money has the same Buying Power (this is a technical term in economics) as the 100% did before. Buying up HQ items and selling them later will only prove advantageous if the demand for that item increases post ARR and thus causes the price to end up at something higher than 10% of what it was before. Other items may end up with values less than 10% of what they were before. It's a gamble that some people like to bet on.

Outside of this, everyone has the same amount of gil porportionally as they did before, and no one person suddenly becomes richer or poorer than they were before as a sole result of redenomination.

The other posts above are also pretty spot on.

[Quesse]

It could hardly be more clear.

Yoshida said himself that gil is being redenominated. 1 decimal place to the left for all gil amounts in the game.

Not sure why there is still confusion on this.

That said, I completely disagree that this will have 'no impact'. Some wards pricing has been psychologically ingrained. It will be very hard to break. Prices will drop to match but not by 1/10th - no way.

[Jaeger]

This is not a simple math problem. Unfortunately people never react purely logically nor predictably in any market system. There are a number of highly technical economic theories as to why this happens in any type of market system. Basic macroeconomics cannot properly attempt to define this, advanced economics has major problems trying to define it as well. This is just reality and we all have to deal with it. The possibility of zero inflation or deflation in currency is highly improbable.

The likelihood that our purchasing power will diminish is almost a certainty to me.

1) People will not all of a sudden reduce their prices to 10% of current value.
2) My guess is, at some point before 10% of current cost is reached, people will start buying.
3) There will be more people playing, especially new players. This should increase demand at a higher rate.
4) While supply/demand will definitely change, whichever items end up highest in demand and hardest to obtain will cost relatively more in ARR than they would in 1.0.
5) Probably other stuff too that is impossible to guess at this point.

Not to mention the investment in savings can be represented in time, industriousness, and ingenuity. Those who saved will be losing relatively more than those who did not save.

To put a number on someone's effort required to save, lets say player A saved and player B did not save. Player A loses 90% of their saving and player B loses 90% of their savings. Player A's effort in saving, lets make that a number which equals 1000. Player B's effort in saving, lets make that a number which equals 10.

Player A loses 900 points of their effort, while player B only loses 9 points of their effort.

This would be OK if you could guarantee an economy to react logically and predictably. This is just not a reality...

[Alhanelem]

It could hardly be more clear.

Yoshida said himself that gil is being redenominated. 1 decimal place to the left for all gil amounts in the game.

Not sure why there is still confusion on this.

That said, I completely disagree that this will have 'no impact'. Some wards pricing has been psychologically ingrained. It will be very hard to break. Prices will drop to match but not by 1/10th - no way.

Some will drop by more, some iwll drop by less. It depends largely on how supply and demand plays out upon release. If people try to exploit the redenomination, they will quickly find that few people will buy into it. It's just like when money inflates, some prices change more/less/faster/slower than others. People will have to re-psychologically ingrain their pricing, because nobody is going to pay drastically more than they do now just because the currency was redenominated Most buyers aren't any more or less stupid than sellers.

The likelihood that our purchasing power will diminish is almost a certainty to me.

The likelyhood your purchasing power will diminish is negligible at best. it doesn't usually happen in real life, nor will it in the game. Purchasing power decreases when costs go up but income does not. The influx of gil into the system relative to the amount coming out is going to stay roughly the same (Not exactly the same, considering part of the reasoning for the redenomination). Therefore you're not going to see any wild shifts in prices, unless a shift and supply and demand causes it.

Finally, any shift in purchasing power will affect everyone by the same porportion. A redenomination, being a simple conversion of X number of units to 1 unit, cannot disrupt this.

Not to mention the investment in savings can be represented in time, industriousness, and ingenuity. Those who saved will be losing relatively more than those who did not save.

Player A loses 900 points of their effort, while player B only loses 9 points of their effort.

This is a non-issue. Everything is scaled in equal porportion. the same portion of gil is applied to all. You need to look as a percentage, not as per unit. There is still the same percentage gap in 1000 vs 100 as there is in 10 vs 1. Both parties lost the same portion of the effort the put in. Both parties have the same buying power they had before.

In closing, yes, it is actually a simple math problem. You can try to spin it to look like people with more money are being hurt more, but that is not the case.

The only real impact to the economy being caused here is the removal of a common consumable.

[Jaeger]

This is a non-issue. Everything is scaled in equal porportion. the same portion of gil is applied to all. You need to look as a percentage, not as per unit. There is still the same percentage gap in 1000 vs 100 as there is in 10 vs 1. Both parties lost the same portion of the effort the put in. Both parties have the same buying power they had before.

In closing, yes, it is actually a simple math problem. You can try to spin it to look like people with more money are being hurt more, but that is not the case.

Instead of efforts being represented by points, and player A losing 900 points of effort, and player B losing 9 points of effort. Consider points equal to hours spent towards the goal of saving. Consider player A losing 900 hours of their playing time, and player B losing 9 hours of their playing time. You can debate how much of an issue it will be, but you cannot simply call it math problem nor a non-issue...

There are examples of redenomination in real economies. These are never simple math problems. Granted real economies are more complex and scaled larger, but there are enough similar characteristics in a game economy to consider them.

[Zumi]

After thinking about it there actually is an issue with this. Which is, will the player market reduce the cost of items by 9/10s as well. Probably won't settle all the way 9/10s lower so some of the players buying power now is actually lost. It will probably effect cheaper items more then you think.

For example 30k for a cobalt plate belt the current price, that should be 3k but say people think 3k is too cheap and the price settles at around 10k, which in the old currency would be buying it for 100k.

Fact is the prices of items will be totally wiped clean and new prices will emerge. Will they be exactly 9/10s lower now? Most likely no since this is a player driven economy and people are free to price stuff at whatever they want and yes they can get away with selling cheaper items for a lot more then what they use to be worth.

[KaplanHomahru]

Instead of efforts being represented by points, and player A losing 900 points of effort, and player B losing 9 points of effort. Consider points equal to hours spent towards the goal of saving. Consider player A losing 900 hours of their playing time, and player B losing 9 hours of their playing time. You can debate how much of an issue it will be, but you cannot simply call it math problem nor a non-issue...

You are still thinking in literal values.