Alolan_Apples
“Assorted” Collector
Before I go over what's going on, I am going to be at a casino today. I'll be gambling, but only for fun. I may check up on this site and see how you're doing while I'm there, but most of the time, I'll be playing. Hopefully I win big, and I may talk about my experience there tomorrow.
So you must've been aware of what's going on with the TBT-IG exchange rate. As of we all know, the exchange rate has been going up at unstably high. Now the average rate is 10 million IG per 100 TBT. Some of the sellers of TBT don't even want to sell their TBT at 5 million per 100 anymore. Back when New Leaf came out, I learned that the rate was as low as 500k per 100 TBT. Then it went to 1 million per 100 TBT. I may not be on this site long enough, but I know about the exchange rate from earlier. Then it raised to 2 million per 100, then even higher. When I joined this site, it was at 5 million per 100 TBT. Then, people wanted to do it for 6 million, then 7 million, then even 8 million. Now it's at 10 million. There's no way I'm buying TBT at that ridiculously high rate.
Very late on my first month here on TBT, there was a thread discussing the exchange rate between forum bells and New Leaf bells and how high it has been. Some people blame duping crowns, but I don't think duping is a culprit here. Granted, it is cheating and not an honest way of making the big bells, but beetle farming and shark harvesting are even bigger culprits of the inflation (even though they are accountable for 4% of the blame). Here's why:
There are four reasons behind the inflation rate. They're not necessarily facts, but these are my theories I found on his site.
Supply and Demand:
This is easily the most important reason behind the exchange rate increase. The first side is demand. As a former Economics student (yes, I've taken both Macro and Micro in college), I learned that demand is the desire to buy something. When price goes up, demand goes down, and vice versa. If demand is high on scarce goods, the price goes up to drive down the demand or raise the supply to the equilibrium point, when quantity supplied equals the quantity demanded. When there's a lot and when the demand is low, the price drops so either the supply goes down or the demand goes up to meet with the equilibrium.
How does this apply to TBT? Well, making Bells in ACNL has gotten easier than ever before. We could ask for others' to give us Bells, but we can get them on our own. For orderable items already cataloged, we may want Bells from other users, but we can re-order them all we want. What about seasonal items? They can time travel to get the items they need. PWPs, house expansions, GracieGrace furniture? Since you can make a lot of money by making island trips at night for rare fish and insects all year round, you don't even need to spend a lot of TBT to get others' IG Bells. A long time ago, making 100,000 Bells in-game was much harder. Now, it's not that difficult to make even a million Bells as long as you use the beetle farming and shark harvesting methods. Since making in-game bells has gotten a lot easier, people aren't demanding as much. Of course, demand for IG Bells has always been high, but it has decreased in the marketplace. If the turnip bug where the buyer's turnip prices are always low from time traveling was never fixed, and if New Leaf didn't have the island, then demand for in-game bells would be a lot higher in the marketplace. This may lower the price for TBT since it's actually raising the price on the in-game side.
As for the TBT side, there are a lot of things we want with TBT. Collectibles, art, profile edits, hosting contests, stuff from other games, and even TBT hoarding. Demand for TBT bells has always been high, so we raise the IG price on TBT to meet up with the equilibrium.
What about supply? Like I said before, it's gotten a lot easier to make in-game bells. Also, back at the time the rate was low, there wasn't as many people playing as there is now. With more people joining TBT, and with more people playing ACNL, the supply is going up. This lowers the TBT price for IG bells, but that means the IG price for TBT bells is going up. And TBT bells are a scarce resource. The only way to make them is by posting, trading, and special giveaways.
To summarize what I said, demand is always the same the whole time on both sides, but when they enter the marketplace, in-game Bells have a high supply and low demand. Making in-game bells is a lot easier, which means we don't need as much from others as supply greatly increases. On the other side, TBT Bells are hard to make as there's a lot of items people want with it.
Collectible Craze:
This is another major reason why the rate has gone high. If there's anything that people want on this site more, it would be collectibles. The problem is, some collectibles sell out too fast and in order to buy rare collectibles from other users, they have to pay hundreds or even thousands of TBT. Even the high prices on collectibles from the shop isn't keeping them from being sold out too quick.
There are some rare collectibles, such as the chocolate cake, yellow letter, blue candy, and even the red pinwheel. With the exception of the pinwheel, all of them have high TBT prices to the shop, and may be the highest of their category. But what makes them more expensive to the site is the limited stock they have. Not just limited, but low. And a lot of people try going to the shop at once. The easiest way is to save up a lot of TBT bells. Again, TBT is a scarce resource, so a lot must be obtained to get a rare item.
This is similar to the supply and demand problem, but that's one of the reasons why TBT bells have a high demand.
Advantages of Inflation:
Raising the exchange rate has an advantage. If everybody has to stick with the same rate, and if someone is desperate for in-game bells, the one demanding IG bells has an advantage. He/she doesn't have to go beetle farming or other ways to make bells. At a high rate, not much TBT bells are needed to spend on in-game bells. Sooner or later, they would be demanding for even more bells at a low price.
Changing the rate is a double-edged sword. Raising the rate would make it harder to earn TBT, but you don't have to spend as much for a lot of in-game bells. Lowering the rate does the opposite. If you were selling TBT, you won't make as much in-game bells, but if you're buying TBT, you don't have to spend as much.
This is another reason why lowering the rate is a bad idea.
Who controls the market:
This is the last reason why the rate has gone up. In reality, the government may decide the tax rates and how much funding one program gets. They can also decide what laws are passed. But do they control the prices of goods or houses? No. The markets control the prices. Buyers demand for some goods, and they are less willingly to buy at a high price. Sellers supply a lot of goods, and they are less willingly to sell at a low price.
On TBT, the same is true. I never thought the mods control the rate. So who controls the exchange rate? The community on TBT. If they choose to ask for more in-game bells at a low price or are willingly to spend on more in-game bells for a certain amount, the rate goes up. The prices on Lassy's guide are a result of the same cause behind the exchange rate. It's not one user who decides the prices. It's all the users.
So here's what I'm thinking about doing. I'm going to save up my TBT bells to do one thing: lower the exchange rate. Although people aren't willingly going to do that anymore, I plan on selling TBT bells at the rate of 1 million per 100 TBT, so people can get some easy TBT bells at a time inflation has taken over.
That is all on my views of the exchange rate. I'm not trying to insult any of you for raising the price. This is just a list of reasons in my view. If you want to know why it's high, these reasons best explain it.
So you must've been aware of what's going on with the TBT-IG exchange rate. As of we all know, the exchange rate has been going up at unstably high. Now the average rate is 10 million IG per 100 TBT. Some of the sellers of TBT don't even want to sell their TBT at 5 million per 100 anymore. Back when New Leaf came out, I learned that the rate was as low as 500k per 100 TBT. Then it went to 1 million per 100 TBT. I may not be on this site long enough, but I know about the exchange rate from earlier. Then it raised to 2 million per 100, then even higher. When I joined this site, it was at 5 million per 100 TBT. Then, people wanted to do it for 6 million, then 7 million, then even 8 million. Now it's at 10 million. There's no way I'm buying TBT at that ridiculously high rate.
Very late on my first month here on TBT, there was a thread discussing the exchange rate between forum bells and New Leaf bells and how high it has been. Some people blame duping crowns, but I don't think duping is a culprit here. Granted, it is cheating and not an honest way of making the big bells, but beetle farming and shark harvesting are even bigger culprits of the inflation (even though they are accountable for 4% of the blame). Here's why:
There are four reasons behind the inflation rate. They're not necessarily facts, but these are my theories I found on his site.
Supply and Demand:
This is easily the most important reason behind the exchange rate increase. The first side is demand. As a former Economics student (yes, I've taken both Macro and Micro in college), I learned that demand is the desire to buy something. When price goes up, demand goes down, and vice versa. If demand is high on scarce goods, the price goes up to drive down the demand or raise the supply to the equilibrium point, when quantity supplied equals the quantity demanded. When there's a lot and when the demand is low, the price drops so either the supply goes down or the demand goes up to meet with the equilibrium.
How does this apply to TBT? Well, making Bells in ACNL has gotten easier than ever before. We could ask for others' to give us Bells, but we can get them on our own. For orderable items already cataloged, we may want Bells from other users, but we can re-order them all we want. What about seasonal items? They can time travel to get the items they need. PWPs, house expansions, GracieGrace furniture? Since you can make a lot of money by making island trips at night for rare fish and insects all year round, you don't even need to spend a lot of TBT to get others' IG Bells. A long time ago, making 100,000 Bells in-game was much harder. Now, it's not that difficult to make even a million Bells as long as you use the beetle farming and shark harvesting methods. Since making in-game bells has gotten a lot easier, people aren't demanding as much. Of course, demand for IG Bells has always been high, but it has decreased in the marketplace. If the turnip bug where the buyer's turnip prices are always low from time traveling was never fixed, and if New Leaf didn't have the island, then demand for in-game bells would be a lot higher in the marketplace. This may lower the price for TBT since it's actually raising the price on the in-game side.
As for the TBT side, there are a lot of things we want with TBT. Collectibles, art, profile edits, hosting contests, stuff from other games, and even TBT hoarding. Demand for TBT bells has always been high, so we raise the IG price on TBT to meet up with the equilibrium.
What about supply? Like I said before, it's gotten a lot easier to make in-game bells. Also, back at the time the rate was low, there wasn't as many people playing as there is now. With more people joining TBT, and with more people playing ACNL, the supply is going up. This lowers the TBT price for IG bells, but that means the IG price for TBT bells is going up. And TBT bells are a scarce resource. The only way to make them is by posting, trading, and special giveaways.
To summarize what I said, demand is always the same the whole time on both sides, but when they enter the marketplace, in-game Bells have a high supply and low demand. Making in-game bells is a lot easier, which means we don't need as much from others as supply greatly increases. On the other side, TBT Bells are hard to make as there's a lot of items people want with it.
Collectible Craze:
This is another major reason why the rate has gone high. If there's anything that people want on this site more, it would be collectibles. The problem is, some collectibles sell out too fast and in order to buy rare collectibles from other users, they have to pay hundreds or even thousands of TBT. Even the high prices on collectibles from the shop isn't keeping them from being sold out too quick.
There are some rare collectibles, such as the chocolate cake, yellow letter, blue candy, and even the red pinwheel. With the exception of the pinwheel, all of them have high TBT prices to the shop, and may be the highest of their category. But what makes them more expensive to the site is the limited stock they have. Not just limited, but low. And a lot of people try going to the shop at once. The easiest way is to save up a lot of TBT bells. Again, TBT is a scarce resource, so a lot must be obtained to get a rare item.
This is similar to the supply and demand problem, but that's one of the reasons why TBT bells have a high demand.
Advantages of Inflation:
Raising the exchange rate has an advantage. If everybody has to stick with the same rate, and if someone is desperate for in-game bells, the one demanding IG bells has an advantage. He/she doesn't have to go beetle farming or other ways to make bells. At a high rate, not much TBT bells are needed to spend on in-game bells. Sooner or later, they would be demanding for even more bells at a low price.
Changing the rate is a double-edged sword. Raising the rate would make it harder to earn TBT, but you don't have to spend as much for a lot of in-game bells. Lowering the rate does the opposite. If you were selling TBT, you won't make as much in-game bells, but if you're buying TBT, you don't have to spend as much.
This is another reason why lowering the rate is a bad idea.
Who controls the market:
This is the last reason why the rate has gone up. In reality, the government may decide the tax rates and how much funding one program gets. They can also decide what laws are passed. But do they control the prices of goods or houses? No. The markets control the prices. Buyers demand for some goods, and they are less willingly to buy at a high price. Sellers supply a lot of goods, and they are less willingly to sell at a low price.
On TBT, the same is true. I never thought the mods control the rate. So who controls the exchange rate? The community on TBT. If they choose to ask for more in-game bells at a low price or are willingly to spend on more in-game bells for a certain amount, the rate goes up. The prices on Lassy's guide are a result of the same cause behind the exchange rate. It's not one user who decides the prices. It's all the users.
So here's what I'm thinking about doing. I'm going to save up my TBT bells to do one thing: lower the exchange rate. Although people aren't willingly going to do that anymore, I plan on selling TBT bells at the rate of 1 million per 100 TBT, so people can get some easy TBT bells at a time inflation has taken over.
That is all on my views of the exchange rate. I'm not trying to insult any of you for raising the price. This is just a list of reasons in my view. If you want to know why it's high, these reasons best explain it.
