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Also, gilselling and buying isn't hiking prices. People get pissed at people that buy gil, when no money is actually made. It's transfered. Nothing is lost except for real Dollars/Pounds/Other currency.
Good point. Most governments regulate the creation of currency as a check against inflation and to help the currency retain its value. For example if the US mint was given authority to double the cash supply to the US economy, prices could be expected to double, and the value of the dollar would reduce by roughly 50% in the world market.
The reason is simple, more currency in the channel creates lower values for that currency. So it takes more currency to purchase the same good.
Now in the case of someone like IGE selling currency in an MMO, the money is not 'new'. IGE cannot make money, they can only take existing gil and transfer it from person to person. Square is the only one 'making' money.
I kill a goblin, get 7 gil. That gil is 'new' money. it did not exist in the economy untl I killed that Gobby and it came into my possesion. The gobby also dropped an Earth crystal which I sell inthe AH for 100 gil. That gil is 'old' money. Someone else had it first, another player has transfered it to me in exchange for that crystal.
If that player then loses the crystal in a synth or drops it, then it's lost, nothing can come of it. But if they sell it to an NPC for 15 gil, then there is MORE new money in the game. If they craft an item and it sells to another player, then that gil is 'old' as well. But many crafter will blow out stocks of low level poorly selling items to NPCs, infusing the economy with 'new' money.
The argument threre is that the gil lost when selling to an NPC over the AH evens out. But it's not true. The person who might have bought that Harp for 2000 gil still has his 2000 gil but I now also have 400 gil that never existed becuase I sold it to an npc.
Even when I spend 10,000 at the AH to buy supplies to make an item and I can only earn back 5,000 gil by selling to an NPC, this is not a net loss to the economy..it is to me...but there is now still 10,000 gil in the hands of other players from my purchases, and a NEW 5000 gil in my posession from the NPCs.
All IGE does is take existing currencies, and for a real world price, re-distribute it. This has ZERO impact on the value of the currency in a real sense. There is no more and no less gil in the world as the result of an IGE sale.
What you CAN argue is that it may shift the perceieved value of gil in the eyes of the gil purchaser. Now you have a person who can "earn" 1 million gil with a few mouse clicks and a couple of bucks, instead of a month of tedious farming and effort. So this person has less effort and value attached to the gil so there is less hesitation to overspend on a item.
I suppose in a sense it's a bit like a teenager learning the value of money. For so many years needs are filled with 'I want' and the item appears, no conncection to the labor and effort required by the parnets to earn the money to make the purchase, but when the time comes that "I want" is answered with "earn it" suddenly a $400 iPod, which seemed pretty cheap...after all its ONLY $400, becomesan expensive item that takes weekes of sweat at the local grease burger joint to earn.Suddenly $400 has a new sense of value and worth, there is an effort and labor attached to it that was previously absent.
Same with buying gil versus farming it....buy it and you have no sense of effort so an item is "only" 100k gil, but if you have to farm it, then that same item is "A F@#*& 100K!!!!"