Deflation

I wrote about deflation before, but an analysis on WoWenomics demanded answer. They claimed that the deflation is caused by the following things:

1: Mudflation (game-only event caused by new patches: the new items make old ones worthless). I completely disagree as mudflation should not affect items that are not replaced by new drops like tradeskill materials and consumables. Currently they fall with the rest.

2: People are trying to make money by farming endlessly, mass-producing items, decreasing the price of these items. While I agree that it's true, this is not a cause but a consequence. If it was a cause than the price of the grindable items (elementals, ores, herbs) would deflate fast, while the price of rarely dropping items and leveling stuff would stay or even inflate. People could also turn to daily quests from grinding to increase their money income, especially since dailies provide reputation too.

3: The items were overpriced at start and now prices are normalizing. It is true in the first two weeks when dumb kids are wasting the gold they grinded for months in TBC. But we are three months into the expansion and deflation continues. One also has to consider that the term "overpriced" is completely un-scientific. An item worth exactly as much as people pay for it. "Overpriced" usually means "people would not pay that much if they knew X". Most obviously such claims can only be made after X was revailed, in a form "people would not paid that much if only they had known X back then".

4: There are gold sinks that suck the gold out of the market. I agree that they are here and they motivate players to waste their gold. However there were also gold sinks in TBC from 5K epic flyer to Haris Pilton. I seriously doubt that the players developed their motive to ride expensive mounts on Nov 13, and were furgal before. Also notice that the 5K epic flyer was a serious upgrade, while the current gold sinks are completely useless.

5: Alt leveling players pour stuff to the market when leveling their tradeskills. Completely wrong for several reasons: people had alts in TBC yet there was no deflation. Tradeskills are leveled using a few items, so it's responsible for 5 pages of 0.5G Glyph of Voidwalker but not for overall deflation. Tradeskill leveling inflate the price of the tradeskill rough materials, just remember herb prices when inscription was aired.

+1: Tobold wrote that the reason of the deflation is people have no point buying. You don't need gear, enchants, gems, consumables, you can crush Naxxramas in any gear. People have reached the virtual "game over" limit, so why bother buying. The "no challenge will destroy civilization" idea is not new to philosophy, the most (in)famous work is done by a certain mathematician. While it's not possible in the real world, in an artificial enviroment the "you can reach anything without effort" can be (and in WotLK is) reached. Tobold's explanation is true on recession and not true on deflation. It's completely true that people wear less crafted epics than they did in BC. Back in BC-premiere if you were a new clothie and did not have mooncloth/shadowcloth/spellcloth set, you shouldn't bother applying to a serious guild. Now the lvl80 versions of these items are flooding the AH without buyer. So, just as Tobold said, there is much less demand for these items, therefore less are crafted = recession. However people are not just buyers but also sellers. If we assume they reached "game over", they not only stop buying, but they should stop farming. Why would anyone grind elementals or fly circles for mining nodes if he does not need anything? Such person just disappears from the market, does not buy, does not sell.


While some of the above statements are true, none of them is the reason for deflation. I believe the reason is exactly the same like in the real world: the deadly mixture of deregulation and stupid people.

Back in TBC, the epic tradeskill items and all raid boss drops were BoP so practically out of the market. You either raided/PvP-ed them out, or you did not have them, period. Now you can buy them. This means much more people are buying them, so you can trade with them, moving thousands of gold, and you can trade with their materials.

This change opened huge opportunities to businessmen. Both to professional ones, and also to the lucky bastards who won the /roll for the BoE boss drop. In TBC the AH was a side-game like the Shat'ari Skyguard or Ogri'la. You could do it for your own fun, maybe you could gain some nice items, but you could completely miss them. Now AH is a serious source of gear. It's not only a bigger market, but also forced lot of business-illiterates to the AH.

I believe the reason of the deflation is that businessmen and lucky bastards could rip insane amount of gold from the morons. I had 50K at the end of TBC with more than a year playing., with about 1.5K/week income. That was pretty nice back then, I had 5K before I was 70, no grind for the epic skill. Now I have 10K/week. I doubt that my skills grew 700% overnight.

I believe deflation comes from the following scheme:

• The moron wants epix that he cannot get from VoA, Sarth+0, Plague and Spider quarter
• The moron goes to AH or spam /trade
• The moron makes a very unfavorable trade
• The businessman or the lucky bastard get lot of gold for minimal work, either spend it on some useless vanity, or simply keeps it, removing gold from the system.
  
• After the purchase, the moron is broke, he has no money to support his needs. So he keeps on grinding to get some money, yet it's me who get money on his farming, by relisting his eternals as expensive crystals. So despite his hard work, he stays poor, farms more, makes me more rich. You load sixteen tons, and what do you get? / Another day older and deeper in debt. / Saint Peter, don't you call me, 'cause I can't go / I owe my soul to the company store.

If my scheme is true, than it's true for the real world economy too, and the recession-deflation will continue until governments don't make strict restrictions on the markets to save the dumbs from the consequences of their dumbness. The common saying "The worst private owner is better than the best bureaucrat" will change into "The dumbest bureaucrat is wiser than 90% of the customers".

The Great Depression was not a mistake of the free markets, it is the free market in its perfect form. All those unemployed and starving people suffered not because of some mistake or "evil", but because of their own ignorance. According to Darwin, they must die. Of course I'm not telling to let 70-80% of the population die. I'm telling that we cannot have free markets without 70-80% dieing, since they are too ignorant to be able to take care of their money. The Great Depression ended when Roosevelt threw "free market" ideas into the wind, introduced New Deal, where the great income of the businessmen was taxed and the money was spent on creating jobs for the people in form of constructing roads and dams. Notice that in the New Deal Roosevelt forced the taxpayers (the 20-30%) to spend their money on roads and dams. Very much anti-free market action, but worked.

The economical crisis of today is nastier than the Great Depression, since the governments can't create work so easily like back then, when unskilled manual labor had value. Nowadays when a machine can do the work of thousands of menial workers, you can't send out the unemployed people to dig holes (actually you can, but it's pointless). Today only the skilled work is needed. So the only way out is to elevate taxes and spend them all on education, turning these dead weight of mindless carcasses into thinking human beings.

I'm unsure if a democratic country, where the dumb's vote worth just as much as yours can implement this, neither I care. If it will be China to implement this New-education-deal, than I'll be happy to join them. In the meantime, we need more regulation to buy enough time for the morons to finish the schools.


What about WoW? Well, I'm completely positive that:

• the deflation will continue
• the low prices will discourage material farming, causing a recession
• wast majority of the players will be permanently low on money, being unable to buy crafted items or paying the repair/consumable cost of raiding
  
• I will reach money cap in 2009 with less play than I had in TBC
• Blizzard (the government of WoW) will have to do something to address this problem

What can Blizzard do:

• Implement more daily quests: will increase my income significantly, no other effect
  
• Increase daily quest rewards: will do a one-time inflation step, devaluing the businessmen's money, but still leave the vast majority broke
• reinvent BoP on crafting: would force lot of people to reroll professions, and re-leveling would need materials, forming a demand for them. Questionable if it could work, since nerfed raids could be completed without these BoP items.
• Put CD on BoE epic crafting: would provide profit for crafters, encouraging leveling crafting professions, creating demand for materials.
  
• un-nerf instances and raids, forcing the players to either learn (opposite of dumb) or leave. This would solve the problem, but not in a way Blizzard wants.
• introducing hard servers: this would separate the smart from the dumb, protecting the latter from the former, would solve the problem, since on easy servers there would not be economy, everyone would farm for himself
  
• New Deal: "If the players donate 10K metal bars, 10K cloth/leather, 10K herbs, a magic tower is created in Orgrimmar, providing +10% damage and healing for all guildmembers both in PvE and PvP, the list of the bigest donators are written on the side of the tower" It would encourage businessmen to buy materials for donation, sending their money into the market.

One can ask what a person can do against deflation and recession, both in WoW and real world. The good news is that you actually can do something against it.

• If you are poor, you can do the most by improving your economical knowledge, learning how to spend smartly, and how to make more money. By making more money, you can spend more, and by spending, you send liquidity into the markets. In WoW: find out how could you make money and spend it on crafted gear, enchants, gems. By doing so, you not only improve your gear but also give jobs to the crafters and material-farmers.
• If you are rich, you can do the most by supporting valuable efforts, like gearing up a resistance tank, or a healer/tank gear for a respecing DPS of your guild. By doing so, you give jobs to the crafters and material-farmers. Be careful though not to waste your efforts into help-begging M&S. Giving something to them equals to throwing it to the trash heap. In real world, supporting education and scientific research are such things while charity is a big no!
  
• And above all, if you are rich, teach your guildmates how to make money too. The deflation is caused by the dumb people who are poor, therefore forced to sell their items/workforce cheap. Every dumb converted into thinking human being makes the economy healthier and the world better.

Burn those bridges!

Several posts were written recently about problems in guilds or leaving guilds.

Tobold wrote about skipping hard content with his guild because they are too weak. He choose to be silent and abandon progress (he claims that only Malygos will be skipped, but if Ulduar will be harder than Naxx, he'll have to skip that too). Most of his commenters suggested gquit, of course quietly and without buring bridges.

Liore wrote about gquitting, directly suggesting "you’ll probably be coming back at some point, so don’t burn any bridges!" and "your guild leader wants this process to go as smoothly as possible".

Matticus wrote about a textbook gquit. It was "perfect" since the quitter did it "at non-peak hour" and "he left quietly".

Obviously I mostly disaggree. At first there are two points to be listed when I agree with being quiet:

• If you seriously cut back gaming altogether. The guild or its leadership has nothing to do about you getting married, got a new job, or Blizzard messed the game up too much for you. Although I'm not really sure why you leave the guild, since you can just log on less, but if you don't want to hang around them after you choose not to raid with them it's OK. Say goodbye and leave.
• If you are leaving because of social reasons. You can't stand another player, you have some friends calling you somewhere else. ("Friends" here means people you really like opposed to some random guy you use to raid with.) This is a typical "it's not you, it's me" case, the other guildmembers are neither responsible for, nor can do anything about your choice.

The third reason for gquit is "guild does not progress fast enough", meaning "M&S is pulling me back". This case I suggest you to fight for your progress. You will mostly lose and have to leave. However I suggest that if the M&S make you leave, give them hell before you do! The reasons:

• I assume the guild is not an M&S ghetto (the fact that you are still there suggest that). I guess Tobold's guild is good example: can clear Naxx, can't clear Maly. There must be some good players, several average guys pulling their own weight and some M&S. You are not the only one who want progress here! However they are social, meaning "won't speak up if it can cause confrontation". But if you speak up, they will join. So if you start openly speak about X or Y underperforming in the raid, several will support you. (Always target certain M&S, blurry comments offend those who are not targeted and ignored by the targets.) Result: most probably several gquits on the M&S part or you being kicked.
• People overvalue their groupmembers and the group. There are masses of scientific research proving it. So if you quit quietly, you'll be the "bad one" while the group will be the "victim of treachery". They will most probably think that you were a loot whore or a lazy prick who did not want to work for the group. No one can claim that if you are kicked after attacking an M&S named X or forced to leave by everyone supporting him (he does 700DPS because he is just ilvl200, needs more gear). Everyone will know that you wanted progress and blamed not the whole group just one-two bad eggs.
• The grass is not always greener on the other side. The other guild you join may be just as bad as the old one. Or worse. You will have thoughts that "after all they were not all that bad". And you crawl back, keep on boosting M&S and lose all right to speak up. After all you knew exactly what kind of guild it was and came back. If you burn every bridges leading back to such guilds you will have to move forward and finally will reach a proper place.
• Even if you lose, you made an example that speaking up against the M&S is possible. Most social people believe that criticizing others is simply evil and the whole world will hate them. They will see that you are not hated by the whole world, just by the M&S themselves and by their close buddies. Maybe they will not follow you instantly. But when they see you as Twilight Vanquisher while they are still wiping at Thaddeus, they will remember that it all started when you told: "I won't suffer these M&S anymore!"

PS: Don't bother to go to the officers. They are there, they could see the obvious with their own eyes if they wanted to. The pure existence of M&S in the guild is an unquestionable sign of their failure. They are either M&S themselves or socials who rather boost M&S than risk confrontation.They will most probably claim that the M&S is just ungeared (note: I wrote this before Tobold claimed exactly that).

Weekly report

I wish the weekly reports were more than copy and paste, but it seems no one try to take my businesses, so I can go ahead selling the very same things: glyphs, bags, mongoose enchant.

I've made 10K since the last report.

The only thing worth mentioning is that the price of the TBC enchanting materials increased significantly. So I restarted my little farm.

Last week there was some competition for the bags, this week they gave up and all bags were mine.

I'm stockpiling some inks for the 3.1 dual-spec-glyph rush and nothing else. I have some stacks of frost lotus, and I put the titansteel bars away instead of selling on creation but that's all.

Blogging for money

There are options to make money with the blog. I dismissed the idea without thinking many times, now Pugnacious priest's post made me collect my ideas.

After all, I have 1300 subscribers (don't look at the feedburner icon, it's messed up), 1500+ unique visitors, so I could make some cash. You are most probably surprised that a goblin missed this opportunity. I got offers in mail for placing more targeted (and better paying) ads from "gold guides" and gold farmers.

The fact that I find these useless and stupid, and consider all advertisements simply pollution, should not bother me. Just because it's crap, I can still sell it to idiots, after all, that's part of what I do at the AH.

The main problem with being payed for blogging is that you start to afraid losing visitors/subscribers, since they cost you. Now I don't give a damn if I offend some moron. I delete troll comments like "this blog was good source of goldmaking but now you give us your bullshit about social people, stop it or we leave". Do it and see if I care!

If I'd have anything to lose I'd start to self-censor myself, removing lines that might offend people until my blog turns into some politically correct crap that even I wouldn't read (and therefore would be losing visitors too!).

At first a totally subjective reason: I don't want to destroy my blogging fun forcing myself to reject my own ideas and write something I find useless. (It's anti-goblin, I should be writing what brings me the most money even if its disgusting)

Secondly a more objective reason: My biggest loss in real life is tax (and forced health insurance and forced car insurance and other fees that I must pay or go to jail). The money I could gain from blogging is spare change compared to the money I "donate" to the politicians and welfare leeches of my country. Spreading goblinish ideas is a very selfish move: I convince people not to waste gold and time to M&S in the game.

This move has nothing to do with game-things like shot rotations, boss tactics or purple pixels. When someone rejects an M&S, he rejects another living, breathing, feeling person. Granted, he does not has to look into the M&S's face. He can also be sure that the M&S lose nothing but pixel gold and pixel gear. Yet, even if it's just an easy simulation of rejecting an M&S, it is a little step in a way to the point when the person is capable of standing up front of his friends, co-workers, family or even a political rally and speak up: "I want my hard-earned money to be mine. I don't want to support complete strangers just because they are poor."

If enough people will say that, the world will be a much better place. I hope, that I can contribute to the creating of this better world. Not because I'm nice, simply because I want to live there. So I consider my ad-free blog as an investment that I expect to have returns.

PS: The point of the post is "my blog is free because spreading my views pay off". You can argue with this point, but not with my views here. You'll have many opportunities for that, I promise.

Feed error

My "readers by feedburner" dropped to 1/3 of the previous. My "individual visitor" count did not changed significantly. I can also see that Tobold has 813 readers, Matticus has 600 (normally both are way above 2K).

Does anyone know what the source of the error and can I do anything to fix it?

Another victim of M&S

Tobold just wrote that he refuses to go to harder content with his guild because "I don't mind wiping as long as I think that if I could just improve my own game, we would do better next time. But sitting there thinking that well, healing can't be improved any more, I'll just need to hope that the damage dealers get their act together, is insufferable."

He is not alone with this decision. My girlfriend officially ended her raiding carrier, declaring that both her surv hunter and prot warrior will not set foot into any group content. She is giving the game its last chance by leveling a resto shaman, hoping that healing is more challenge and control over the situation. I guaranteed her it's not, but hope dies last.

The problem of both of them is in group situation you depend on the performance of group members. If your capabilities are way beyond the "good enough" level, you can carry some M&S, but even you have limits. I can heal Naxx10/Sarth+0-10/Voa10 with someone who heals half as much as me, but can't heal them all alone.

Tobold just faced that trivializing the content does not help. While Malygos can be killed by people in lvl70 gear, it cannot be killed by a raid with too many M&S. The problem is that the M&S performs at the group tolerance level. They only make effort if their social acceptance is on the line: the group just told them to do X or leave. The problem is that social people won't tell it until they really has to. Tobold decided to not tell this. He was stressed to the "insufferable" level, yet he said nothing. He asked "Am I the only one resetting his Recount before every fight and noticing all those people consistently doing less than 3k dps?". I guess not. He was one of many who saw what's going on and did nothing.

Note that a blurry comment like "we need more DPS", or "everyone must be above 2K" is considered nothing. A statement that is considered something need to be addressed to someone and require a specified something, and also should include the consequences of failure to comply.


We can see two problems and four solutions here (one bad and one good).

Groupmember (player) level: The M&S pulls me back:

• Bad solution: I help them more (Boost them one more time in Naxx). The effect is simple, the M&S gets reward for bad performance, so it will keep on performing bad.
• Good solution: "I refuse to be the victim of the M&S. Either the lowest performer of the raid leaves the guild, or I do. I want the decision this week and I refuse to do anything until it is made". If the group chooses performance, the worst M&S is removed, the others are warned. If the group chooses social values, at least you can leave without any guilt.
  

Management (Blizzard) level: The overall group performance is low:

• Bad solution: Lowering expectations (nerfing content). Since the performers can carry more M&S, they do to avoid drama. Noticing that, the M&S puts even less effort into the work. Result: the group struggles to reach the lower expectations.
  
• Good solution: Increasing the reward for performance, and making it easier to remove bad eggs from the group. This way the performers will have more motive and also more means to get rid of the bad eggs.

In the game, Blizzard is not motivated to help you remove the M&S since they are also subscribers, so you can wait forever for a management solution. Actually they nerf to make it easier to carry them and the rare harder content give ridiculous rewards (titles and mounts), so no one is really motivated to move on to these contents.

Your only choice is to set the "Either the lowest performer of the raid leaves the guild, or I do." Have no hopes, 90% will choose to let you go. At this point you can either go for a topguild or abandon raiding completely. Either way you are free from the pointless grind of helping M&S.

Fear of trolls

Larísa wrote that being linked by WoW Insider can be bad because trolls find your blog and well... they will troll it (is it a verb?). She expresses concern that "I sincerely hope that there aren’t more bloggers out there who consider turning silent or start to whisper because of the WoW Insider readers."

She links to Krizzlybear writing: "I wanted this to be a blog where I could feel safe to say anything I want, without having to face the scrutiny of people telling me to STFU or DIAF. With the advent of the Daily Quest, I’ve been scared to post anything of any value, fearing that the trolls from WI would come over and just destroy everything that I’ve worked so hard to make. And when you’re scared to write, something’s terribly wrong."

If you are just doing PvE, you can be nice to everyone, since raid bosses and farmed mobs do not belong to "everyone". However if you make business in WoW or real life, you compete with other people. Some of them do not share my views about competition and get mad at you. Others share it, just learned that it pays to act like being mad.

People, for some strange reason, fear from people with negative emotions. In a real life face-to-face situation I can understand them a bit, since he can lose control, attack you causing lot of the paperwork and bureocratic investigation until you prove that it was a self-defense situation. On the other hand in safe places like a workplace, a guarded shop, and especially the internet, the other person cannot cause you any harm.

Still, people afraid of being harassed, being told to STFU or called asshole or other not too nice things. I've never really understood why that is. To me, a harassing internet troll was annoying like a bug. I have to stand up from my seat and hunt the noisy fly with a towel. I have to click on the dustbin icon, the confirmation checkbox, the delete button and the link-back-to-post because of them. Annoying and time consuming, but not at all fearful.

In business (in WoW or real), you will face people who don't like what you are doing. They will write and tell you bad things. Most of these things are not even threats! "STFU", "you dumbass" and "you hearthless piece of shit" are not warnings of physical attack. They just mean that the other guy is pissed off. So what?

Trolls shall be ignored not because they are trolls (people who act offended/offensive just for fun), but because offended/offensive people altogether can be ignored. They cannot harm you. Their words are just noise like the big nasty fly's. You have nothing to fear of.

Would I fear being linked by WoW Insider? No. Would I be afraid if all the trolls would unite to come and pollute my site? No. I'd welcome them with a Clint Eastwood quote.

Liars and casinos

I got a troll comment:

In the past three days, I made 110K.
I make around 40k in an hour.
I run my own casino, my casino's odds are 65+ = 2x, 95+ = 3x, I generally have some very good customers who pay in excess of 5-10k bets.
I was the first on my server.. so everybody trusts me.

Why did I care? I could simply delete it with the rest of the trolls. However this troll is typical. He can be rather dangerous for the inexperienced since he can make him learn something stupid. Obviously for anyone who is in the moneymaking game in WoWm his results are ridiculous. 40K/hour means 660/min, no way that so many idiots exists in the game with that money. No doubt that there are lots of morons who would waste their money in the casino, but such idiots never had 660G in their life. However for someone who just started making money this is not obvious.

Let's see what kind of internal errors can be found that could even by having 0 background information:

• "I made 110K. I make around 40k in an hour": If he made 40K/hour he would definitely not stop at 110K, but keep on doing it until he has all alts full of gold.
  
• I made a Google search and found that 1000G is around $5 at the goldsellers. So his income would be 200$/hour. How come that all the goldfarmers are not in the casino business?
• "so everybody trusts me" Yeah, like there is anyone in the world who is trusted by everybody?

So a simple troll can be pointed out by simple logic. Among business information there are lot of incorrect and purposefully false information. By simple logical scan against itself and easily available information one can filter out obvious lies.

Now let's talk about casinos! Usually the "casino" is a low level character in a populated city, seeking clients. They group, the client trade him the bet, /roll, and if the roll is higher than a preset value, he wins 2xbid or some other amount.

Blizzard says: Casinos are, in and of themselves, not currently against our policies. ... While this practice may not, in an of itself, necessarily represent a violation at the moment, there are activities associated with running an in-game casino which certainly can represent violations; such as spamming or scamming.

So one can run a casino. Does it worth it?

The profitability of a casino is based on four assumptions:

• The odds favors the house. For example the troll's odds above make B*3*0.06+B*2*0.3+B*0*0.64=B*0.78 average payment (B: bid). So in an average match he takes 22% of the bids.
  
• There are enough dumb people who can't calculate the odds.
• When someone wins, he is dumb enough to put the money back to another roll, until he finally lose them all.
• The mentioned dumb people have significant gold.

The first one is easily set. We can assume the second, ... khmm... crystallized fire. The third is guaranteed, since those who want to win money, want more.

The catch is the fourth one. Actually, I don't know if there are enough farmed money at the hand of the dumbs to make a casino worthy. I have to add, that I haven't seen any casino myself, just read about them. My server is clean of this practice. So if you want to try your luck in casino management, do it and post the results.

Update: here is the reason why I see no casinos:
This is correct. While European and US policies are usually similar, they aren't necessarily identical. Casinos remain against European scam policies at this time, and submitting an in-game ticket to report the matter is indeed an appropriate step to take. Thank you! The European scam policies can be viewed at:
http://www.wow-europe.com/en/policy/scam.html