Tony Rubolotta

Play Money for Everyone
October 25, 2008

I’m coming out of the closet. I confess to being an on-line game player. My youngest son introduced me to FFXI a little over a year ago and I have been playing on and off ever since then. The game has a rudimentary economy that is largely free market but flawed with spurious inputs that have little relation to the goods and raw materials harvested by the players. Nonetheless, it works to some degree allowing high achievers and industrious players to become wealthy. The currency of the game is the “gil”.

Though the game rules binding players prohibits real money trading, called “RMT”, it happens. People will sell some things they acquire in game on the Internet for real money. The things I’m speaking of are usually acquired by completing some difficult and time consuming task in the game. The prices these things sell for in real money can be quite astounding at times, going for hundreds and thousands of dollars. The game owners (Square Enix) will evict players who engage in this practice of RMT, if they are discovered.

By the way, this game is very popular in Japan but has a strong following here and in Europe as well, particularly France, England and Germany. My numbers are probably out of date, but the game claims to have a following of about 250,000 people.

When I started a year ago, several Internet sites offered to sell one million gil, the game currency, for as little as $29.05 with a promise of delivery in 10 minutes. Within the past few days, I saw one site offering one million gil for just a fraction over $40. The value of the gil, a totally fictitious currency, rose 39% against the dollar in just a year. How the gil is doing compared to other currencies I don’t know, but the change in value against the dollar was a remarkable commentary in itself about the strength of the dollar.

Is our economy going in the tank? Wall Street investors are bailing out as fast as they can save occasional bargain hunting excursions. The bottom of the stock market is still not in sight. The Fed can’t give money away despite an obscenely low interest rate. I’m deluged with emails and phone calls promoting credit cards and credit extensions. With every announcement by the Federal government of some new “fix”, “tweak” or “investigation”, more investors flea the market. The housing bubble has burst but no one really knows where the equilibrium point will be. Mortgage defaults continue and personal bankruptcies are on the rise.

Some people may be tempted to point to falling crude oil prices as a positive sign, but that too may be a misinterpretation. If demand for gasoline, diesel oil and jet fuel are dropping because of an economic downturn, the price of crude oil will fall due to falling demand. Energy fuels the economy, and a slowing economy needs less fuel. It may be as simple as that.

The Democrats who bear the overwhelming responsibility for creating the economic meltdown claim they can fix it with more of the same. That alone will not tank the economy, but when enough fools say they are willing to vote them in and it looks like they may succeed, sane people are going to react with sane behavior to protect what they have, even if its play money called the gil.

The most disappointing moment for me during the second debate was John McCain’s revelation of his plan to save the economy with yet more tampering, tweaking and “fixes”. I expected that from Obama, and I suspected that from McCain, though I had “hope” he wouldn’t. Both McCain and Obama are living in a fantasy world in the belief that the economy is something like a patient that can be treated with surgery, amputation, drugs or some other intervention they can direct with a predictable outcome. Their economic advisers are more like witch doctors looking for the incantations they think will stop the panic. But it isn’t a panic, which is why their incantations won’t work. It is a deliberate and planned extraction by people with a totally rational fear of what additional government meddling will do in the long run.

The party is over and those who know it are leaving before the check comes due. Tweedle-dee and Tweedle-dum can only postpone the day of reckoning. Keep your eyes on the gil. It seems to be a more reliable economic indicator than the prognostications of either candidate.