Continuation of discussion about IC-Rheinland conflict

[Friday]

Standard sequence of events in the face of credit risk/default:

1) Government tells lender to frack off.
2) Lender issues bad credit report on government, refuses to offer any more loans.
3) Business confidence and consumer confidence drops. Consumers start to withdraw funds from banks to protect their cash. Banks no longer have enough money to lend to businesses. Businesses can't hire new staff - economy freezes.

This is called a recession.

If the situation escalates, businesses are forced to close, panic sets in among the markets and people begin to sell stocks, bonds, assets at lower and lower prices. Stock market crashes.

Government tries to print more money to compensate, works for a little while, but inflation goes up as more money is needed to buy the same amount of stuff.

Banks start to fail as new sources of cash dry up, and people pull all their money out of the bank and hide it under their bed.

WELCOME TO THE DEPRESSION!

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[Lobster]

the Trade Lanes became theirs.

The info card you presented Anne doesn't say that Rheinland pays for the mainteance of the trade lane/gate network in Rheinland.

Trade-lane belongs to Rheinland.

Trade-lane needs to be repaired.

Who pays for repairs?

Owner of Trade-lane.


Seems pretty simple to me. As I said in my previous post though, the Rheinland government is floating on IC money. So if we want to get technical about it, IC does pay for the trade-lanes. The point is rather about the principal of the matter, as either way, if IC stops funding Rheinland, the trade-lanes stop getting paid for.

I'm rather looking forward to the outcome of this event, as it will enforce role play consequences on those who refuse to accept that their favorite factions have weaknesses which can be exploited.

Same here. Im sure Rheinland is guilty of this as well, though we try very much to keep it to a lesser degree of ridiculousness.

[farmerman]

It's interesting to see possible outcomes of this economically. But is Sirius really comparable to modern Earth? Internationally, there are so many fewer entities in Sirius that banks may need to go about things completely differently.

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Faction info links: Samura Heavy Industries : LWB : Watchers

[Benjamin]

Also, if everyone uses credits, can Rheinland even print more money?

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Join Cryer Pharmaceuticals

[Lobster]

printing money would be a baaaaaaad idea

http://economics.about.com/cs/money/a/print_money.htm

[Varyag]

Standard sequence of events in the face of credit risk/default:

1) Government tells lender to frack off.
2) Lender issues bad credit report on government, refuses to offer any more loans.
3) Business confidence and consumer confidence drops. Consumers start to withdraw funds from banks to protect their cash. Banks no longer have enough money to lend to businesses. Businesses can't hire new staff - economy freezes.

This is called a recession.

If the situation escalates, businesses are forced to close, panic sets in among the markets and people begin to sell stocks, bonds, assets at lower and lower prices. Stock market crashes.

Government tries to print more money to compensate, works for a little while, but inflation goes up as more money is needed to buy the same amount of stuff.

Banks start to fail as new sources of cash dry up, and people pull all their money out of the bank and hide it under their bed.

WELCOME TO THE DEPRESSION!

Someone took some business courses!

[RP]

That's it RM. Strong arm your economy, kick the lenders out because they are greedy and use short sighted tactics on your infrastructure and food production.

We are polishing the fleet, waiting for the inevitable victory of the revolution and the parade of our forces walking into New Berlin to right the government.

Love

The Hessians

/[RP]

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"I looked up and all I saw was green death"

[DarthBindo]

printing money would be a baaaaaaad idea

http://economics.about.com/cs/money/a/print_money.htm

Let's repeat history, shall we lol.

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gone four years, first day back: Zoners still getting shot in Theta :|

[farmerman]

Also, if everyone uses credits, can Rheinland even print more money?

I believe that, yes, they could. At least produce more of their own (whether or not they literally print it I am unsure of). Here are some relevant bits of rumor and the like (emphasis mine), related to Rheinland historically doing that as well as having separate currencies:

133747:
Rheinland has seen better days. Since the end of the war, we've had one crisis after another. The Popular Revolution never fulfilled its promise. The government just keeps issuing more money in order to pay off its debts, so the inflation rate is out of control. It's running about 5 percent a week right now.
 
134210:
The Rheinland credits that I am paid with lose more value each day. The inflation we are experiencing here is so great that the only kind of payment that keeps is actual Commodities. If it wasn't for the fact that we get room and board, I would find other work.

134190:
I've almost got enough saved to retire. I don't know what I'm going to do or where I will go. I might go to Liberty. I don't really want to, but I always get paid in Liberty coin so the currency doesn't lose value before I can spend it.

525181: (Planet Stuttgart)
Colonised in late 94 A.S., shortly after the exploration of the Stuttgart system by the famous Rheinland explorer, Von Rohe, Stuttgart was hailed as the Jewel of Rheinland. A green, almost inconceivably fertile world, owing to the high concentration of carbon dioxide and oxygen in the atmosphere, planet Stuttgart was colonised heavily by tens of thousands of would-be farmers, attracted by the prospect of making a living on a planet that did not spend most of its time bathed in sub-zero temperatures.

It quickly became the primary food producer for the whole of Rheinland, with many plants from Earth and elsewhere in Sirius being grown with ease in the oxygen rich atmosphere. It was during the formative years that many of the huge farming clans and dynasties started, the largest of which were the Bachmeier, Erlichmann, Sterl and Weiss families, who controlled enormous plantations and farms across the planet. The farmers organised themselves into a collective known as the WVS, a powerful Farmers Rights union that lobbied New Berlin for farming subsidies successfully for centuries. The government money boosted Stuttgart's food output and generated a huge amount of wealth for the farmers, but the happy situation was not to last.

As the Eighty Years War against the Gas Miners Guild wound down towards its ignoble conclusion, the Rheinland government, realising that it was almost bankrupt, decided to cut all subsidies to planet Stuttgart almost overnight. The WVS protested massively, but was completely ignored. It later came to light that the Rheinland government had borrowed massively from Liberty during the many years of fighting against the GMG and, with the end of the war in 669 A.S., Liberty was calling in its debts. Having no money to pay them with and in an attempt to renegotiable more favourable loan conditions, the Rheinland government gave Liberty corporations, Synth Foods in particular, unrestricted access to the planet Stuttgart.

With the Rheinland currency completely devalued and unemployment skyrocketing by the day, the vast majority of the farmers on Stuttgart were virtually bankrupt along with the rest of their nation. Synth Foods moved in immediately, buying out many of the farming dynasties over the following decades, including the huge Erlichmann family, which had had a series of mysterious disasters occurring on a number of plantations in the year preceding their collapse. Most of the remaining farmers were forced to buy all of their seeds and poor quality fertilisers from Synth Foods, and sell much of their produce to the Liberty corporation at the same time. Despite this, the population continued to rise as immigrants poured in to serve as the labour force on Synth Food plantations, with the current population estimated at around 540 million as of 817 A.S.

In 770 A.S., Synth Foods began increasing the carbon dioxide level in Stuttgart's atmosphere in order to make it even easier to manufacture Synth Paste. Again, the WVS protested heavily to the government, but was duly ignored. This sparked a number of sabotage incidents at Synth Food owned factories and it lead to Synth Foods forcing the Rheinland government to replace virtually all of the original WVS board members with their lackeys in 775 A.S., destroying the farming union's voice in New Berlin. It was this final act that lead radicals from the WVS, including the former head of the Erlichmann family, to found the LWB later the same year, in the hopes of one day driving Synth Foods from Stuttgart and returning the planet to its rightful place as the Jewel of Rheinland.

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Faction info links: Samura Heavy Industries : LWB : Watchers

[Cryer Pharmaceuticals!]

Ah, so everyone has their own currency and we just see Credits in game because it's less fuss.

Also geez, 5% a week. I mean, I knew Rheinland was poor, but this is pretty severe financial disaster territory even before this IC thing. I want to see more RM moaning about their lack of pay!

edit: hhnng, Benjamin

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[DarthBindo]

*sprays coffee all over desk*
five percent a WEEK.
My god, if that's a real rumour.......

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gone four years, first day back: Zoners still getting shot in Theta :|