To someone who knows about economics

[Agentt]

I WANT TO CRASH THE ECONOMY!!!!

GIMME YOUR SECRETS!!!



Alright, let me calm down a bit.

So, today I had thought that I want to crash the economy.

Now, let me clarify that I know absolutely nothing about economics.
I am so bad at it, I just, don't have any expectations.


But the concept of crashing the economy sounds so fun! I was wondering if we could make it like a game here. Not like monopoly cuz that would be too complicated; but the concept should remain the same: The economy is crashing and you have to rack up as many coins as possible before inflation bankrupts everyone.


So, let us conduct a thought experiment.
Let us say that I, Agentt, one of the 13 Lords of SH, the apostle of Tony creates a currency called Scribbler (S).

1 S is defined as the amount of money you would pay to an average author to write 1000 words for you.

I set this to 5 USD.

Now, different authors have different rates.
Some charge you 0.8 S.
Others chard 1.5 S.

It is up to them to set their rates, however, what is important is that any USD they receive will be converted to S first and then sent to them.

And there also exist Artists as well! And editors too. Let's say that they too are following this system.


So, we have a system of readers, authors, artists, and editors, all of who are trading with each other for their services.



Now, assuming that no real-life inflation or deflation happens; is there a way to...exploit this thing? Like cause inflation here or something?

 

[Macha]

You don't have to do anything... it's happening soon.

 

[DarkeReises]

Nont

 

[Zirrboy]

Context for anyone wondering:

 

[Puji-Maki]

Um... COVID?

 

[Deleted member 58005]

Now, let me clarify that I know absolutely nothing about economics.

Aha! Then I already know much more than you. Economics is about the economy.

 

[Agentt]

Aha! Then I already know much more than you. Economics is about the economy.

Naruhoudo ne

 

[Jailbreak571]

...
I see.

 

[Deleted member 58005]

Naruhoudo ne

I'm glad I was able to teach you something today *smug*

 

[Kilolo]

if someone wanted to crash an economy of certain things, they would need at least two of these 3 things : Leverage, Market, or Connection. (from this point onwards, let's call it the cerberus of market crasher)

the way you explain the Scribbler makes me think you misunderstood the point of the Scribbler itself. the Scribbler is just a tool of a measurement, the real value are lies on what you can bought with it. which is words.

back to the cerberus thingy, you can't use leverage for words, because it's self explanationary : why the heck you would use leverage to buy words. the number of lexicon is just vast, and it could always be filled with new one. so buying bunch of words that worth nothing is just a waste of money.

which brings the option to only Market and Connection, and the thing that we could trade using S are just words. is it possible? verily.

how? all you need to do is just buy the word that really high demand in the market and bought it through the connection you had, in other words : use the S coin to buy the word "Carefully" and then coin it as your personal trademark.

see what I mean? the word "carefully" has a huge demand in the market and everyone wanted to use it, but if you coined it using Scribbler you can legaly prohibit anyone but you to use that word, because you already coined that word and it belong to you alone.

no one can use the word carefully even if they wanted to, and even if they tried to censoring it with one * mark, the meaning will still be obvious and you have all the right to revoke those word. because the power of Scribbler grant you the permission to do so.

that is just one example for one word, imagine if you can still coined any other bunch of popular words on the market and coined it to yourself, people have no other choice but to find alternative word (which is we all know, very lame), or they could buy the rights of that word from you with a marked up margin for like.... lets say at least 5 times fold of the initial price.

that, is the way to destroy the economy. as long as you know which words you have to coined, and where to legaly buy it.

 

[JayDirex]

@Agentt I know everybody got jokes, but i can HONESTLY answer this question. An easy way of crashing an economy is to create hyperinflation with the money. And this can be done by destroying the value of a countries money by oversupply and causing HYPER INFLATION

AN EXAMPLE OF HOW TO TO THIS: GOLD SURPLUS

If you have a fictional country or realm where the money is backed by gold (This can be done because gold is both rare and valuable) you can have whatever Villian or MC come around and magically "Create, summon, or whatever" so much gold rock that gold itself becomes no longer "scarce." and when the gold is not "scarce" it loses value. And when the gold loses value so does the money.

hence- Hyper inflation: The money becomes so worthless that you need more and more of it to buy the smallest things.

See: Zimbabwei hyperinflation : https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

 

[Agentt]

@Agentt I know everybody got jokes, but i can HONESTLY answer this question. An easy way of crashing an economy is to create hyperinflation with the money. And this can be done by destroying the value of a countries money by oversupply and causing HYPER INFLATION

AN EXAMPLE OF HOW TO TO THIS: GOLD SURPLUS

If you have a fictional country or realm where the money is backed by gold (This can be done because gold is both rare and valuable) you can have whatever Villian or MC come around and magically "Create, summon, or whatever" so much gold rock that gold itself becomes no longer "scarce." and when the gold is not "scarce" it loses value. And when the gold loses value so does the money.

hence- Hyper inflation: The money becomes so worthless that you need more and more of it to buy the smallest things.

See: Zimbabwei hyperinflation : https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

well, the thing with zimbabwei is fairly famous, i would be surprised if someone didn't knew I am a millionaire in zimbabwei dollars.

 

[JayDirex]

well, the thing with zimbabwei is fairly famous, i would be surprised if someone didn't knew I am a millionaire in zimbabwei dollars.

But you get the idea. A villain/MC can totally ruin an economy by either printing too much paper money, or creating such a surplus in the money's backing (typically gold) that the gold becomes worthless (if everybody has as much gold as they can find than gold has no value).

 

[ARedFox]

I studied economy in HS. I got this. Probably.

First you have no quality control so some writer will likely scam someone paying for 1k words. This could be done by using an ai, speed writing and ignoring any issues, or just not delivering. This will likely only be a one time trick effective on newbies.

Then there’s collectives. A group of people could come together as let’s say artists. They all work together to take as many commissions as fast as possible for as cheap as possible. Because they work as a team and try to constantly lower their prices they outcompete those who can’t keep up price or speed wise. Then you get something akin to only big groups or those desperate able to make money. And then they can essentially charge what they wish and lower anytime competition appears.

Beyond that some people could just choose violence. They might ask for work and then just not pay. This wastes time and might force them to demand pay first. Also might just force someone out of business. And if you have to pick between a group asking for money upfront vs after the work it’s finished, it seems like there’s a rather clear choice.

Then what if someone really just woke up the wrong way and decided to sell this new currency for less. That person would be losing money but now people could buy the currency for less. So it would be valued less. That poses the threat of high inflation and a collapse. People feel less security and then sell while they can lowering the value more.

There also might be MLM schemes or multi level marketing schemes. I’m too lazy to explain this. If you don’t already know google it.

All the artists could group together and raise rates. No outside competition means that someone will end up paying that increased price.

There’s one more issue I can think of. Foreign currency. This is less something to exploit and more something to be aware of. The average wage in countries where poverty and a weaker economy run rampant is lower than the US. So it’s very common for people in foreign countries to make less than US minimum wage by a long shot. If one of them wanted art, writing, editing, or whatever they have to pay a higher % if their pay check. At the same time it’s unfair to ask the writers, artists, etc. to do the work for less. Just something to be aware of.

Im sure I forgot something and messed a lot up. Lack of sleep does that.

 

[bloodyWriter]

I studied economy in HS. I got this. Probably.

First you have no quality control so some writer will likely scam someone paying for 1k words. This could be done by using an ai, speed writing and ignoring any issues, or just not delivering. This will likely only be a one time trick effective on newbies.

Then there’s collectives. A group of people could come together as let’s say artists. They all work together to take as many commissions as fast as possible for as cheap as possible. Because they work as a team and try to constantly lower their prices they outcompete those who can’t keep up price or speed wise. Then you get something akin to only big groups or those desperate able to make money. And then they can essentially charge what they wish and lower anytime competition appears.

Beyond that some people could just choose violence. They might ask for work and then just not pay. This wastes time and might force them to demand pay first. Also might just force someone out of business. And if you have to pick between a group asking for money upfront vs after the work it’s finished, it seems like there’s a rather clear choice.

Then what if someone really just woke up the wrong way and decided to sell this new currency for less. That person would be losing money but now people could buy the currency for less. So it would be valued less. That poses the threat of high inflation and a collapse. People feel less security and then sell while they can lowering the value more.

There also might be MLM schemes or multi level marketing schemes. I’m too lazy to explain this. If you don’t already know google it.

All the artists could group together and raise rates. No outside competition means that someone will end up paying that increased price.

There’s one more issue I can think of. Foreign currency. This is less something to exploit and more something to be aware of. The average wage in countries where poverty and a weaker economy run rampant is lower than the US. So it’s very common for people in foreign countries to make less than US minimum wage by a long shot. If one of them wanted art, writing, editing, or whatever they have to pay a higher % if their pay check. At the same time it’s unfair to ask the writers, artists, etc. to do the work for less. Just something to be aware of.

Im sure I forgot something and messed a lot up. Lack of sleep does that.

I‘m something of an expert myself … and I don’t agree. If you can trade the coins back into usd, you have created a stable coin which can be used in the perfect world just like a real currency. So all the problems he mentioned won’t affect it. Monopolies haven’t crashed the dollar yet and it still exist despite _incert-random-type-of-violence-here_ . But you now face the same problems other stable coins do. What is their intrinsic value? Why can’t I just pay a writer with $? In my opinion, your currency is a pyramid scheme for several reasons (Reply if I should elaborate further) as such, your currency will crash regardless what you do.
The second option you have is to forbid trading your coin back I to $. The problem here is that you need to offer the writers something in return, otherwise they will see your currency as worthless and won’t use it. So your currency crashed from the start.

 

[ARedFox]

I‘m something of an expert myself … and I don’t agree. If you can trade the coins back into usd, you have created a stable coin which can be used in the perfect world just like a real currency. So all the problems he mentioned won’t affect it. Monopolies haven’t crashed the dollar yet and it still exist despite _incert-random-type-of-violence-here_ . But you now face the same problems other stable coins do. What is their intrinsic value? Why can’t I just pay a writer with $? In my opinion, your currency is a pyramid scheme for several reasons (Reply if I should elaborate further) as such, your currency will crash regardless what you do.
The second option you have is to forbid trading your coin back I to $. The problem here is that you need to offer the writers something in return, otherwise they will see your currency as worthless and won’t use it. So your currency crashed from the start.

I kinda agree but what if no one wants to trade back? That was my thought. Like great you have the option but if no one wants to buy s coins at normal price because someone is offering to sell there’s for less. Then add on that guy losing money for a crash, what if he bought all at once or near all at once at the start. He’s no longer buying at all so you can’t sell for the same price you bought at.

It sounds reasonably unreasonable to me but I also haven’t slept in like 2 days.

-Edited note: sleep deprived brain just thought of that as essentially a pump and dump or rug pull albeit with someone losing money instead of raising the price. That have a name? Am I just too tired to think?

-Second edited note: Won’t be able to respond for like 2 hours minimum. Literally about to get 2 fillings.

Also I’m curious on why you think it is a pyramid scheme. I think I get the basic idea but I’m curious.

 

[JayDirex]

I‘m something of an expert myself … and I don’t agree. If you can trade the coins back into usd, you have created a stable coin which can be used in the perfect world just like a real currency. So all the problems he mentioned won’t affect it. Monopolies haven’t crashed the dollar yet and it still exist despite _incert-random-type-of-violence-here_ . But you now face the same problems other stable coins do. What is their intrinsic value? Why can’t I just pay a writer with $? In my opinion, your currency is a pyramid scheme for several reasons (Reply if I should elaborate further) as such, your currency will crash regardless what you do.
The second option you have is to forbid trading your coin back I to $. The problem here is that you need to offer the writers something in return, otherwise they will see your currency as worthless and won’t use it. So your currency crashed from the start.

 

[RepresentingCaution]

Stay in bed all day, and the world will crumble around you.

 

[bloodyWriter]

I kinda agree but what if no one wants to trade back? That was my thought. Like great you have the option but if no one wants to buy s coins at normal price because someone is offering to sell there’s for less. Then add on that guy losing money for a crash, what if he bought all at once or near all at once at the start. He’s no longer buying at all so you can’t sell for the same price you bought at.

It sounds reasonably unreasonable to me but I also haven’t slept in like 2 days.

-Edited note: sleep deprived brain just thought of that as essentially a pump and dump or rug pull albeit with someone losing money instead of raising the price. That have a name? Am I just too tired to think?

-Second edited note: Won’t be able to respond for like 2 hours minimum. Literally about to get 2 fillings.

Also I’m curious on why you think it is a pyramid scheme. I think I get the basic idea but I’m curious.

To your first point: Why wouldn’t the writers want to trade it back? You can’t pay with these coins anywhere else, so they want to have real money instead of these coins.
I don’t get your second point to be honest. If you say your currency is equal to 1$, it is equal to 1$. Why would anyone want to sell for less if there isn’t a crisis? It basically means losing money.

The currency itself is a pyramid scheme as it will be hard to finance operating costs. Someone needs to pay for it and that is mostly done by using the real world money you gained when authors sell their writing. The problem is that they will ask to trade the coins back at some point and then you won’t have the required amount. To counter this, you will need more and more writers to make up for it.

 

[ARedFox]

To your first point: Why wouldn’t the writers want to trade it back? You can’t pay with these coins anywhere else, so they want to have real money instead of these coins.
I don’t get your second point to be honest. If you say your currency is equal to 1$, it is equal to 1$. Why would anyone want to sell for less if there isn’t a crisis? It basically means losing money.

The currency itself is a pyramid scheme as it will be hard to finance operating costs. Someone needs to pay for it and that is mostly done by using the real world money you gained when authors sell their writing. The problem is that they will ask to trade the coins back at some point and then you won’t have the required amount. To counter this, you will need more and more writers to make up for it.

Okay the prompt was crashing this fake economy that has minimal if any rules so far and has been mostly joked around in replies. I think realism was not the most important thing from the start. I thought I made that clear with how I wrote it and the one above it. Your whole disagreement is because you somehow interpreted what I put as more realistic than I intended. It is not. My thought was it was someone who wanted to see the s coin economy burn no matter the personal cost. So with that understanding can you understand why I think it could damage an economy? Do I need to give further thoughts???

Also upon further thought you might not even need to think of it as a pyramid scheme. I think you can cut it down before that. If it doesn’t give extra utility or serve some additional purpose why would anyone use it when the $ exists and people will accept that instead? No reason to buy in in the first place. And if it only works for SH related stuff that’s even worse. At least with some crypto coins they try to offer some utility/function the dollar doesn’t have or get endorsements to increase interest and the perceived value or future value. Probably have to have some rule banning or limiting the $ to even give it a chance. Otherwise if offered a choice I think most take the dollar. Then again there’s always someone interested and speculative enough to buy into bad projects.