EVE General Discussion

It means that bacon is the next moongoo. BUY BACON!

The isk faucets are bounties, NPC buy orders (wormhole blue loot, overseer effects), mission rewards, insurance payouts.

The isk sinks are NPC sell orders (skill books, BPO, loyalty point store), null sec rents, clone upgrades, insurance buy. I can't imagine that the NPC station slot rents pull much ISK from the game.


Several pretty big sinks have been removed. These include the POS fuel and POS structures (replaced by PI) I don't see a reduction in the isk faucets to offset this.


One would expect that profit from mining and profit from ratting should trend to some equilibrium. If I can make 50 million ISK an hour ratting, and less than that mining, then I'll go ratting, increasing the isk in circulation and driving up prices. If I can make 50 million ISK an hour ratting, and MORE than that mining, then I'll go mining instead, slowing the flow of ISK into the game and increasing the amount of minerals, reducing prices. If they are about the same, then people should genreally split.


This, of course, assumes there is a limitless supply of ores for me to mine. If the belts run dry, then I have to go ratting instead of mining. This would increase isk and cap mineral production, leading to inflation.



"And most economists agree that inflation is preferable to deflation where prices fall and people produce less."

That is because in the real world, money is created when it is borrowed into existence. Inflation makes it easier for people to pay back the debt, take on more debt, etc. Inflation also encourages people with money to spend it before it becomes worth less.

Deflation makes it more difficult to pay back debt, take on more debt, encourages people with debt to just go bankrupt, and encourages people with money to hoard it rather than spend it, because it is gaining purchasing power even when stuffed into the mattress.


In EVE, there is no debt per se. You don't have to worry about people walking from their debt, no money being created because people can't get loans, etc. Sure, there is a tendency to buy during times of inflation and sell/hold during deflation. However, the bounty payouts are a fixed stick that can tie prices, somewhat, to a fixed point.


And, finally, it is not the amount of isk that exists, that effects inflation. It is the amount of isk that is actively circulating through the economy. A trillionaire sitting on his ISK, not spending any of it, does not cause inflation. That tirllionaire suddenly decides to buy enough minerals to build 100 supers... that's going to cause some inflation.


Real world, the USA has increased the money supply from $4T to $40T over the last 30 years. Despite this 10 fold increase in the money supply, prices are only up 2x. The reason is because 80% of the money is in the hands of the top 1% richest... and they are not looking to spend their money, only loan it out to others. If they aren't spending, and few are continuing to borrow and spend themselves deeper into debt, then less money in active circulation means low to no inflation.

No, and don't care. I'm a high sec carebear and far more interested in what is going to happen with high sec belts than 0.0 moon goo.

Every expansion, some internet space prophet shows up to declare that the end of the economy is nigh. Like a good little doomsday prepper, I do what I can to be ready for it...

...and then the damn thing doesn't die.

Anyone want to buy 15 billion worth of exotic dancers, frozen food, and holoreels?

Fortunately, grinding missions is just as tedious//enjoyable and boring/relaxing as mining, depending on your perspective.

But, as you say, the equilibrium between ratting potential profit and mining potential profit breaks down as soon as the available of minerals limit is hit.


If mining is more profitable than ratting, I'm mine, assuming there are rocks in belts to be mined. Run out of rocks, relative profit is out the window and I'm off ratting instead of mining. Don't run out of missions like we do rocks.

So what's the point in owning it in the first place?

If CCP do their job properly sometime the next few years, then there'll be a sizeable chunk of players who'll go outside of hisec to mine.

You mis-understand what I am talking about.
I'm discussing isk sinks. (The actual isk to leave circulation)

When a ship is built, the minerals came from asteroids, isk was paid from player's pockets to other players. (no isk left eve except brokers fees and npc taxes.)

How EVE improved my understanding of real world economics.


To understand EVE economics, you have to understand what creates ISK where none existed, like bounty payouts, selling wormhole blue loot to NPCs, or collecting on an insurance policy when your ship goes boom. You also need to understand what makes ISK cease to exist, where it once existed, such as buying skill books, buying ship insurance, upgrading your clone, or buying from the LP store. And, of course, the minor sinks like renting manufacturing or research slots from an NPC station or paying transaction tax on contracts or sell orders.

Other activities, such as buying a ship from another player or paying a currier contract, simply moves ISK from one player to another.



I kind'a understood money creation in the real world. You know.. central banks inject liquidity and banks multiply this seed via the fractional reserve banking system. But how does it REALLY work? What really is money, in the modern fiat currency world? How is money "created"?


The answer is, money is created when it is borrowed into existence. So, in effect, when we say I went to work and "made money" what we really should say is that we "earned money". NO money creation occurs from work or the production of goods and services. Money simply moves from one entity (person, business, government) in those circumstances. You trade your goods and services for money that already exists.

Money is only created when someone (individual, business, government) walks into a bank and takes out a loan, or a business or government sells a bond, or in some other way, goes into debt.

And what gives money its value? The answer is, the fact that you need it to repay your debt. When you took out a loan, you created money and debt in equal quantities. If we all up and decided that fiat money has no value, then people with debt would say "hey' if you don't want that stuff, I'll take it so I can repay my debt". Suddenly we start trading people with debt, the money that is "worthless" for goods and services, since those people with debt are willing to trade stuff to get money so that they can repay their debts... poof. Money has value because the people with debt are willing to tarade stuff to get it.... which is exactly why it has value now.

So, how is money destroyed in the real world? Same way debt is destroyed. If you pay off debt, both the money and the debt cease to exist. If you go bankrupt, both the debt, and an equal amount of money are destroyed.


Now think about this:
Is it possible for everyone to be spending less than they earn, accumulating money?
Is it possible for people with debt to repay their debt, if the people with the money don't spend the money?

SHOULD tax policy encourage those with money to spend it? Or should tax policy encourage those with money to loan it out so that we can grow the money supply by allowing others to go further into debt?

I own X that I plan to use for Y, but I can't afford to lose it. So I guess I should never fly it for now. And if you're going to say, "Then don't buy it if you know you won't be able to afford to lose it" then the "rule" should change to "Don't buy what you can't afford to lose."