Better Business Bureau [Feedback & Advice]

[Valkea]

I was recommended to move my question here from the FTAAT.

I just realized that if I backed my money with kilowatt hours, and it managed to slow down inflation....The rest of the world would keep trucking along with higher inflation then me.

Over the period of like 100 years, this would mean my currency would rise in value compared to others on my homeplanet.

Is there like a economic assistance thread? I think I accidentally made the cost of labor so much more costly compared to other nations, that no one would buy my exports. This is clearly why China keeps devaluing it's currency.

Should I be panicking about declining imports?

There are pros and cons for a strong and a weak currency, so it depends on how you want your currency to reflect the desired outcomes. For example, if you want your country to have cheaper industrial inputs and cheap imports, then get a strong currency. If you want your country to flood foreign markets with cheap goods or get more valuable foreign assets, then get a weak currency.

[Doppio Giudici]

What would happen if I bought something in another country, using a loan made in that country, using their currency....While that currency had faster rates of inflation then my currency did...provided I made all payments by trading currency at an exchange?

Even if I had to factor in interest due to the loan, would the difference in inflation rates, result in reduced felt interest on my end?

Example, my currency is going from 100 to 101 over the course of a year, theirs is going 100 to 103 over a year, interest rate is 2%.

[Yohannes]

Price stability is also very important. Someone has asked me something similar by telegram and I think it'd be helpful for me to point out that without a stable currency and price stability, the citizens of one's nation will suffer. When currency falls, prices will generally rise. If one do import certain things, they'll rise in price. Essential things such as petrol prices and a range of other basic commodities will be higher

This is one of the reasons why a central bank of one's nation has been given the job of maintaining price stability and monitoring liquidity

[Yohannes]

There are pros and cons for a strong and a weak currency, so it depends on how you want your currency to reflect the desired outcomes. For example, if you want your country to have cheaper industrial inputs and cheap imports, then get a strong currency. If you want your country to flood foreign markets with cheap goods or get more valuable foreign assets, then get a weak currency.

A weaker currency will also make prices more expensive for one's citizens. It can also backfire (i.e. it could hurt your exporters) so the (positively) changing terms of trade could possibly be negated by other bad things. Inflation cld also increase from currency depreciation and borrowing will become more expensive

A stronger currency could possibly increase foreign depositors because of higher interest charged to borrowers in your nation. A stronger currency could also result in your citizens importing more

Edit: That is, it's not as simple as weak currency = flood foreign markets, strong currency = bad (this is not true)

[Doppio Giudici]

Price stability is also very important. Someone has asked me something similar by telegram and I think it'd be helpful for me to point out that without a stable currency and price stability, the citizens of one's nation will suffer. When currency falls, prices will generally rise. If one do import certain things, they'll rise in price. Essential things such as petrol prices and a range of other basic commodities will be higher

This is one of the reasons why a central bank of one's nation has been given the job of maintaining price stability and monitoring liquidity

I'm asking what happens if the interest rate on a foreign loan, matches the difference in their inflation compared to yours.

[Valkea]

There are pros and cons for a strong and a weak currency, so it depends on how you want your currency to reflect the desired outcomes. For example, if you want your country to have cheaper industrial inputs and cheap imports, then get a strong currency. If you want your country to flood foreign markets with cheap goods or get more valuable foreign assets, then get a weak currency.

A weaker currency will also make prices more expensive for one's citizens. It can also backfire (i.e. it could hurt your exporters) so the (positively) changing terms of trade could possibly be negated by other bad things. Inflation cld also increase from currency depreciation and borrowing will become more expensive

A stronger currency could possibly increase foreign depositors because of higher interest charged to borrowers in your nation. A stronger currency could also result in your citizens importing more

Edit: That is, it's not as simple as weak currency = flood foreign markets, strong currency = bad (this is not true)

I didn't say strong currencies are bad (note that I mentioned that strong currencies are great for cheap industrial inputs and imports), and I know it's not the simple after having browsed through every single page on the subject and getting more confused than when I started out. but yes, both have pros and cons.

[Doppio Giudici]

I think I have confused myself.

So I know that if one currency inflates slower then another, it gains value, compared to that other currency.

However, as far as I know, I don't see how this makes goods in one nation cheaper then another.

For example:

If there is America A and America B, completely identical, one has 1% inflation and the other has 1.21% inflation. After over a hundred years or so, America A could have currency worth 3 times or more that of America B.

The issue I see however, is that if you convert Dollar A to Dollar B, the cost of labor is relative to inflation.

The only ways I see strong currency affecting day to day life are : loans, interests rates, and buying things overseas; or people failing to adjust wages to match inflation. The cost of milk will be based on supply, demand, labor costs, and so on; not on strength of currency.

The only reason I think China can get away with currency devaluation, is they somehow keep wages from going up, to reflect money having less value (Or devaluing the currency doesn't make things cheaper).

I must be completely wrong, right?

[Yohannes]

Hi Doppio Giudici, I'll try to address your last post only; I'll leave aside your previous question about Future Technology currency as I believe creativity to be more important for Future Technology things - that is, it's almost impossible to apply realism to your FT RP situation (e.g. I have valuable alternative resources that are not found in real life world, I back my currency using that, I have multiple planets) because realism just won't work with things like that. For me personally, it'd best to just go with creativity and not try to combine realism with FT or even PMT together as I feel they don't go along well together, and realism would just kill the storyline/be bad for creativity

The cost of milk will be based on supply, demand, labor costs, and so on; not on strength of currency.

Say country A is a milk producer and exporter to other countries. The prices of milk (and the income that farmgate workers and company/cooperative/farm shareholders will get) will be depended on the strength of the currency of said nation. If said nation's currency is getting weaker relative to the dominant world currency, then that nation's farmgate workers and shareholders will receive less earnings from their milk exports. This will be reflected also by the government of that nation's economic report summary (i.e. less earnings from exports). Edit: but this could also increase demand for that nagion's milk product because it is now cheaper to buy relative to other nation's exporters - increasing demand means increasing spending and higher output = demand + supply side pressures causing a rise in price level

Movements in currency do impact prices, unless said nation RP as one of those "I produce everything in my nation/I don't import anything at all because I'm super powerful" (which, by the way, is fine - NationStates is a freeform RP website). But in that case we might as well put aside realism or any sense of RP fairness. When currency becomes weaker also, the prices of things we import helping to produce said milk will rise. Petrol, electronics, etc. farmers and workers need to drive to work, if they import certain equipment not produced in your nation, then they will also be more expensive. This, in turn, will increase inflation (just one example)

So yes, they're all connected. This is why price stability is good for one's nation, because it creates the the optimum conditions for economic growth to occur

Edit2: Other factors to affect the competitiveness of your milk products also how popular is your nation (e.g. you're a well-known milk producing nation and your milk products are known for their quality) in the eyes of the market and also whcich segment of market you're exporting your milk to

Re: your China question, I'll answer it after work

[Yohannes]

The only reason I think China can get away with currency devaluation, is they somehow keep wages from going up, to reflect money having less value (Or devaluing the currency doesn't make things cheaper).

Hi Doppio Giudici, my apologies for lateness. Currency devaluation happens when the currency of a nation falls in value relative to the value of the major currency used in that nation's region/amongst its trading partners/in its "world" (or, basket of currencies of that nation's major trading partners). This shift could put pressure on prices of commonly imported products in your nation while lowering export prices; more exports + less imports = theoretically balance of international payments of that nation will be better

This is not a simple process, because there are so many things that can happen. For instance, stock markets in your nation will/should naturally respond to this shift (especially if you're trying to RP it fictionally as govt motivated). Fictional investors in your nation will respond because this could possibly lower returns (e.g. equity returns, business cash flows) from higher currency risk (which deviates from purchasing power parity/equilibrium level). There's different equations that can be used to measure this currency risk (and they will dpeend on your currency system/setting, e.g. managed floating, floating)

now, regarding China. This is the popular thing to talk about these days, but in fact when we look at "currency devaluation" happening, China's not the only one. We have the European Union with its Euro (I'm looking at Germany here; although at the same time the Euro is also too strong for EU countries like Poland and Italy). Arguably we can also point out to Japan doing the same with the Yen back in the 1970s or 1980s (going by memory here someone please correvt me if my date is a bit off!)

China's currency irregularities arguably results from too much savings and too strong an economic growth while the EU's arguably from too much spending and too weak a growth. China's undervalued currency theoretically means (as said previously) better balance of international payments. The Yuan (Renminbi)'s value is undervalued enough that it means more exports relative to imports. This is not something recent. Back in the 2005 China's trade partners did voice their concerns to the World Trade Organisation about China selling its currency and buying other currencies (mainly US Dollar) so that the Yuan would appreciate slower

I guess what you're trying to ask is whether China intervenes directly to influence exchange rate? If that is so, although China's the main problem here (and the topic of your question), this (direct intervention) is in fact not a rare policy instrument used by monetary authorities. The Bank of Japan, for instance, has regularly intervened directly to influence the foriegn exchange market, i.e. to ensure stable exchange rate and/or possibly price stability (back to my previous post about price stability)

[Doppio Giudici]

So you are saying, that strong or weak currency mostly only effects things that factor or are involved in global trade.

Which means that I was right, in thinking that local standard of living and cost of living, decide the cost of local labor.

[Yohannes]

The only ways I see strong currency affecting day to day life are : loans, interests rates, and buying things overseas; or people failing to adjust wages to match inflation. The cost of milk will be based on supply, demand, labor costs, and so on; not on strength of currency.

Hi Doppio Giudici,

Your original question was whether "cost of milk" would be affected by "strong or weak currency" or not (i.e. currency appreciation/depreciation), not whether "local standard of living and cost of living, decide the cost of local labor." My job here is to inform you that yes - "cost of milk" would be affected by the state of your currency. I'm not here, however, to debate with you (although I can do so easily) about something else unrelated (i.e. local standard of living and cost of living, decide the cost of local labor)

I've contributed my time to inform you -- if you want to change the (original) question to something else completely unrelated to your original question (i.e. cost of milk) to support your own biased conclusion, that is your right, not mine (it is not my job to change/attempt to change your mind as that is your nation/you can RP as you want with it)

[Doppio Giudici]

"local standard of living and cost of living, decide the cost of local labor", that is the cost of milk.

It's not completely unrelated, it's more related then most of what you said. The cost of bread and milk is more important, then the cost of imported or exported goods, when it comes to deciding what things will end up costing.

If food, or real-estate is expensive; so will be goods produced in that nation. If the value of the local currency is low, then people will just be paid in piles of the local currency.

This entire time, I have just been trying to know, if the internal economy, when we ignore international trade, would be better or worse off from low inflation rates. Will it effect mortgages, will it effect the cost of locally produced goods and labor, will it increase or decrease the value of government bonds?

In other words, is reduced inflation a very bad thing? Will it kill my economy or is it entirely based on how I view outside trade?

I know that high inflation or deflation will be poison to my GDP, but what about low inflation?

[Yohannes]

---

High inflation disincentives deposits to be placed in banks/institutions because people/institutions know that the value/purchasing power of money/their money is going down. Generally deflation is also just as bad as high inflation (I'll be more than happy to explain why if required)

So... we're going back to my first post: price stability

it's more related then most of what you said

I'll ignore that statement (this is after all Christmas/merry Christmas!)

===

Re: your bond, rate etc. fictionally is there a central bank in your nation?

[Deutschess Kaiserreich]

Are we allowed to have bounties on people here?

If so How would you recommend me to do it?

[Common Territories]

Are we allowed to have bounties on people here?

If so How would you recommend me to do it?

Bounties, like other interactions, requires the other party's (the person you're intending to place said bounty on) consent to the matter. Otherwise the other person can and likely will wave it off with their right to ignorecannon the event. Furthermore, pursuing it to the point you're harassing the other party over it could earn you bad blood with Moderation (harassment under the site rules is prohibited behavior).

Other than that, I have seen a number of threads similar to what you're asking. As an owner of a PMC storefront for example, I've had a number of such customers. But in recent threads I've seen, placing such bounties to willing parties to pirate ships and such has been a recent trend; a "Hey, we don't like this nation! We'll offer pirates this much cash plus the riches they rob to pirate their shipping!" type deal. Anything other than that you're gonna have to be more specific if you want a more clearer answer.

[Doppio Giudici]

---

High inflation disincentives deposits to be placed in banks/institutions because people/institutions know that the value/purchasing power of money/their money is going down. Generally deflation is also just as bad as high inflation (I'll be more than happy to explain why if required)

So... we're going back to my first post: price stability

it's more related then most of what you said

I'll ignore that statement (this is after all Christmas/merry Christmas!)

===

Re: your bond, rate etc. fictionally is there a central bank in your nation?

Of course there is. Low debt, low borrowing, high taxes, reasonable GDP situation, and so on.

[Yohannes]

Of course there is.

Hi Doppio Giudici,

Okay. Looking back I think I've realised why you're confused with my first post (price stability). My apologies, I should've realised that most people are not well acquainted with economic terms (or what I was implying when they were mentioned). The goal of your monetary authority (i.e. your central bank) is to ensure price stability - that is (in your case), a low rate of inflation or deflation. I don't know how your monetary authority works its magic, but I'll assume that you're basing it off real life ones? In that case, your monetary authority does influence rates (whether directly or indirectly) through its official rate

This official rate (i.e. influencing the overnight rate) will decide the main rates of your nation's largest trading institutions/commercial banks (i.e. the prices that money are being sold and distributed for reselling and further lending by your banks). When inflation is high and unsustainable, your monetary authority will increase its rate to act as a brake on inflationary pressures and the opposite with decreasing rate. When your overnight basis points increase/decrease, your commercial banks will also increase/decrease their rates. In my fictional nation's case (the Realm of Yohannes), these first-point trading institutions/large commercial banks which borrowed directly (wholesalers) from Yohannes' monetary authority are subjected to interest at 0.45 per cent more (or 45 basis points higher) than whatever is the rate set by Yohannes' monetary authority; and they are given interest that is equal to the overnight rate initially and then a wee bit smaller than the overnight rate by 0.9 per cent or 90 basis points for their deposits from overnight activities i.e. where other institutions borrowing from large/main commercial banks must repay the borrowed funds plus interest @start of business the next day. This will influence the acceptable range/variation of overnight rates between the commercial banks (to borrow and lend from one another) and will affect the main short-term and long-term rates in my nation's market

Your central bank will have a similar system, unless you're creatively crafting/storytelling (it) as functioning/existing/working a bit differently. If that's the case, however, you'll have to change the way your commercial banks will adjust their rates. Edit: For instance, in my case, I did say that (for one of my posts), "Under normal circumstances, the QROR should be to a certain extent smaller than the ICR set by Economic Palace to influence the short-term and long-term rates in the Yohannesian market. Finally, international developments can also affect the circulation of money in the nineteen countries (i.e., interest rates found in major trading partners of the nineteen countries)."

Low debt, low borrowing, high taxes, reasonable GDP situation, and so on.

Low debt does not necessarily have to be a good/better/superior thing. Having no debt can also be a bad thing. Without debt, theres the possibility that ones nation would not be able to invest in infrastructure and invest in extra supply to meet future demand (capital). This is one mistake that I've seen many players on NationStates RP make. Also, higher debt than usual is not necessarily bad because so long as the nations government can repay/budget for the debt interest then it should be all gud. And if one's government can borrow because of competitive international rate (cheaper than usual) to finance actual growth or much needed demand, then they should (so long as the opposition political groups/parties will not try to turn it against one's gov't)

Edit2: demand + supply side pressures causing a rise in price level (from my previous post) meant inflationary pressures

[Doppio Giudici]

My nation doesn't like to print money or mess around with interest rates, because as a nation with such high taxes and such high government control, we try to give the capitalists of our nation at least something to not worry about. Interest rates appear to never had much problems, even in times of hardship or supply-side issues.

Another thing to note is that a mixture of strong currency and low debt, puts my nation in a position where it can bail itself out to a incredible level. What I mean by this is, the US almost three years of GDP in debt and if something were to go wrong, there is only so much borrowing that can happen. Meanwhile over here, should things go wrong, we can go all the way to where the US is, without much worry, and then recover from it.

For the most part, what I am looking to do, is increase international influence and prepare for some possibility of expensive war/ funding dozens of wars waged by smaller or poorer nations.

Now, I am to this day still not entirely sure if strong currency will effect locally produced goods made with local labor and local parts. I suspect no one knows, otherwise someone would've told me. What I do understand is that a good clean competitive economy, with regulation, high education, and so on; will be good for the GDP.

[Yohannes]

My nation doesn't like to print money or mess around with interest rates, because as a nation with such high taxes and such high government control, we try to give the capitalists of our nation at least something to not worry about. Interest rates appear to never had much problems, even in times of hardship or supply-side issues.

Another thing to note is that a mixture of strong currency and low debt, puts my nation in a position where it can bail itself out to a incredible level. What I mean by this is, the US almost three years of GDP in debt and if something were to go wrong, there is only so much borrowing that can happen. Meanwhile over here, should things go wrong, we can go all the way to where the US is, without much worry, and then recover from it.

For the most part, what I am looking to do, is increase international influence and prepare for some possibility of expensive war/ funding dozens of wars waged by smaller or poorer nations.

Hi Doppio Giudici,

What I say here will probably upset you (and some other roleplayers), and I'm sorry to say this but I'd rather be honest (than try to lie to be on people's good side in an untrustworthy or dishonest way). As I understand you're writing/roleplaying/worldbuilding as a Future Technology/Post-modern technology nation. I strongly believe that you should not try to use economic realism for your FT nation/PMT nation. I strongly believe that realism is not the be all end all of roleplaying/storytelling/worldbuilding. In many cases, creativity/writing ability is much more desirable/better than realism. For me personally, I certainly look up more to people who can write beautiful stories instead of adhering to realism but rarely do write anything In-character/don't know how to write good stories. The reason I did say that you should not bother with economic realism is because there's so many things wrong with what you've just said that I wouldn't bother to try economic realism (it will just confuse you and ruin your worldbuilding). And let's be honest - economic realism, again, is not important at all to/not required for good storytelling

Now, I am to this day still not entirely sure if strong currency will effect locally produced goods made with local labor and local parts. I suspect no one knows, otherwise someone would've told me. What I do understand is that a good clean competitive economy, with regulation, high education, and so on; will be good for the GDP.

My previous posts did explain all that you needed to know, but as I understand it you've missed the points (which is, again, not your fault. As I have said economic realism can be thrown into the rubbish bin/it is not required/it is not needed for good storytelling)

[Doppio Giudici]

DG was my MT account, but then the MT nation changed it's name to PG and now PG and Vadia are my MT accounts.

Reading the rest of your comment now.

[Yohannes]

DG was my MT account, but then the MT nation changed it's name to PG and now PG and Vadia are my MT accounts.

Reading the rest of your comment now.

Hi Doppio Giudici,

It will still be the same. Modern Technology can range from realism (real life to hard but not strictly real life) MT to PMT-ish MT (NS MT to PMT-MT). Economic realism is not required/needed for good storytelling/roleplaying/writing/worldbuilding. I strongly believe that so long as: (1) we enjoy writing what we are writing, (2) we are willing to compromise/put aside certain things when writing with other players/sharing shared storytelling with other NationStates writers and (3) we write interesting stories, then economic realism can be thrown into the rubbish bin and honestly nothing will change/should change. As I've observed on NationStates, economic worldbuilding is a bit different than military worldbuilding in that (thankfully) economic worldbuilding has not been manipulated so bad (through the years) to satisfy NS roleplayers' urge/desire/cravings to "push the boundaries" (if that's the right way of saying it)

This is because in the past the kind of writers who like to push the technology boundaries tend to do so by military RPing/worldbuilding, not economic (and there's nothing wrong with doing so; live and let live, i.e. we all have different things that we enjoy doing). Why? From my observation I will guess that this is because in most people's eyes military = powerplay/competitive play. That said, economic worldbuilding can be turned into competitive/powerplay too (I can easily do so, but I won't), but I'm guessing that it's much harder to do so (and much harder to get away with things, unlike with military stuff before the rise of military realism/community checks/regulation in 2013-2014)

The other thing is economic storytelling/worldbuilding is more of cooperative thing (I don't know how one can turn it into competitive without having to cooperate/compromise to some degree with others first; [ edit: the most common example of this happening - if a NS RPer tries to bloat their gdp per capita, other players who happen to write with them will probably call them out/tell them off) ]. Because of this, economic realism is not needed, because when someone abuse their economic RPing/worldbuilding they tend to be (1) someone who's not a well-established member of the NationStates Rping forums communities and therefore would not be taken seriously at all, (2) and if they are and they try to abuse things (whether National and International Roleplaying or World Assembly), they will sooner or later be called out/be exposed by NS players who are well acquainted with the field of economics out there

It is possible to try to abuse economic worldbuilding by going deeper/more in-depth than simply trying to boost your nation's GDP per capita, but as I've said I (and some other NationStates writers, whether National and International Roleplaying or World Assembly) will easily see through what they're doing/trying to do

[Arthropol]

Hi,

I've recently been thinking about starting a RP thread that involves players RPing characters applying for work positions, and working for one of my companies I own in GE&T.
1. Do you think this idea would work? Has anyone else done something like this before?
2. Would this sort of thing be more suited for GE&T or another RP forum?

Thanks!

[Neu Engollon]

Hi,

I've recently been thinking about starting a RP thread that involves players RPing characters applying for work positions, and working for one of my companies I own in GE&T.
1. Do you think this idea would work? Has anyone else done something like this before?
2. Would this sort of thing be more suited for GE&T or another RP forum?

Thanks!

1. I think it's perfect and a good crossover of sub forums. I RP characters from my companies all the time - beer festivals, economic summits, political and conflict RPs (my PMC). I'm not the only one, either. Plenty of people have done it before, but it's sort of fallen out of fashion.
2. GE&T or NS. Either sub forum works and is justifiable in this case. Nationstates is kind of traditional for character RPs, but seeing that it's economic based, it could work here in GE&T, as well.

[Arthropol]

snip

Thanks for your help!

[Danlina]

I have a really important question: Is there any actual payment in here? or is it purely roleplay?

And I would like critique on my storefront: viewtopic.php?f=6&t=459178