Exchange Rate Chaos

[Nick Walker]

I deposit in Canadian dollars, but have not done so for a while.

As many of you may know, we are in a global financial crisis. Many have speculated that part of the reason for the 3X skills event is that MindArk has seen a dramatic drop in the number of depositors over the last 3 months.

Over those 3 months or so, the US dollar and Japanese yen have climbed in value dramatically, while just about every other currency in the world has fallen (dramatically).

In my case, the Canadian/US dollar were just about equal 3-4 months ago, while today the Cdn dollar is about 1 Cdn = 0.78 US.

A huge difference in a very short time.

I follow these issues a bit, and the analysts mostly say this is due to hedge fund and financial institution "deleveraging". Hedge funds bought a huge number of stocks & commodities "on margin". Those investments have now tanked (down in value $30 trillion around the world). The funds face margin calls and have to sell immediately. There is thus a dramatic jump in demand for the US dollar to pay off the margin debt. This is why we see such a jump in the value of the US dollar.

It is temporary. Once this "deleveraging" is complete, the US dollar will drop like a stone. A huge, huge drop. One figure I saw was from Bloomberg, $7.76 TRILLION dollars in bailouts, loans and funny money advanced to banks and insurance companies to stave off total collapse. A $1 trillion US deficit projected. They do not have this money, and will not be able to sell bonds to finance it (the Chinese & Japanese governments will not buy that much). They will have to print the money out of thin air, which will cause hyperinflation and currency collapse.

So, my questions. Have any of you been impacted by this? Have you also stopped depositing?

I will deposit a bit for the 3X skills event, because it's too good to pass up. But no more.

Will MindArk be forced to switch from the US dollar to the Euro? Will this game even be around in a year?

[aridash]

Originally Posted by Nick Walker

Will MindArk be forced to switch from the US dollar to the Euro? Will this game even be around in a year?

all changing to the euro will do is switch around who has the poor currency rate and will defer problems for one group until the cycle turns and $ or euro is weak/stronger again - its all relative for different countries and currencies. changing currency would do far more damage to the confidence in Entropia economy.

MA and calypso will still be around in a year because they still make money and even iff people people deposit 20% less they will still be making money.

[endermigne]

Originally Posted by Nick Walker

Will MindArk be forced to switch from the US dollar to the Euro? Will this game even be around in a year?

IMO as long as the Dollar is the #1 worldwide currency nobody will even think about changing that. If a different currency (e.g. the Euro was under discussion for the oil industry) takes away that number one position then there will be thoughts.

But if that really happens all of us will have lots of different things to think and care about and rather ignore what MA is doing.

[Artrat]

A few months ago the Rand was at 7 to the dollar, now it's at 11. Needless to say, I don't deposit anymore.

[kygon]

I depo in £ I had it fucking sweet for so long and got used to it, now its the $ depo'eters time to have it sweet

[Jay212]

Originally Posted by Nick Walker

So, my questions. Have any of you been impacted by this? Have you also stopped depositing?

I don't have very much to deposit in the first place, but with the rate as it is now, I just can't afford to, skills or no. And definitely not till after the seasonal holiday period is over.

As far as EU/NP whatever it'll be called, yeah, I agree, it's not going anywhere.

[NightwolfAA2k5]

I was planning a glorious return to Calypso... The crisis put a dent in those plans. I can't deposit at all now

[Immortal]

....waiting for US dollar to crash like a stone.....

.78 is nothing, try 0.6 :/

No changes. Whatever currency wouldn't matter - the US dollar is the only currency recognised by all countries as a benchmark, so no not going to happen.

[NoRC]

Well being in Australia was sweet as we had the dollar climb to around .98, altho now its dropped down to around .64 so needless to say I am no longer depositing... lucky for me i have pleanty of assets in game i can sell off untill the dollar climbs back up so that i can continue playing.

[onyx oZ Zombie]

to everyone who says they are no longer depositing b/c of the exchange rates ... were you also not depo'ing a while back when the rates were the same as they are now, or were you simply not in-game?