What's causing all the inflation?

~Snip~

Beautifully said; I completely agree. I was talking with several local friends who don't play MS but will be studying Economics at Princeton and the University of Chicago next year, and they fully grasp the nature of what's going on and confirm that everything you've explained is logical for a market in this state. I'd say more, but you covered everything, and I would hope people would be wise enough to read what you said in order to understand things more clearly.

Knowledge is power; the knowledge of how an economy works allows one to take advantage of any situation it may be in, and the knowledge of future inflation allows one to take enormous strides to increase their personal fortunes. If you don't believe me, take a look at your signatures; half of you who are pissed off at merchanters for what they did with GFA publicly announce how many diamonds and other Maker materials you have stockpiled. You're using your insider information to create a cache before inflation sets in so you can sell the items at the inflated rate. Oh, wait a sec - that's exactly what iCollect said in this last post, only about GFAs. Substitute Diamonds into the equation and you have what all Maker stockpilers are currently doing.

Middle men exist in any economy where profit can be made from the difference between what sellers are willing to sell for and what buyers are willing to pay. Middle men make transactions easier. lern2economics

I'm not even bothered by the inflation right now. I'm satisfied with the equips I have and I don't really care about money unless I need it to improve my training ability or pay for pots.

Exactly the point. Understand how economics work and that middle men, or people passing around products to make a profit, will ALWAYS exist in a capitalist market.

So long as the demand is there, people will buy the product. My friend learned of the huge value of PS3 prices the week they were first introduced into the North American market via retail stores. At the time, the console systems were selling for up to $3000 on Ebay, though the retail price was around $600. My friend expertly took advantage of the situation by bringing his family to Best Buy on opening day, each purchasing a system for $600, 6 in all = $3600 spent. He then sold and shipped all but 1 within the week for $3000 per = $15,000 gain. $15,000 - $3,600 = $11,400 profit, plus a leftover PS3 for his own use.

Stories like this occur all the time. It's knowing when and how to take advantage of an economic situation, and then actually carrying THROUGH with the plan, that allows people to make money like this. Again, knowledge is power.

U.S. History 101:

 Spoiler

Keep in mind too that insider trading is illegal in the real world; that's why Martha Stewart was imprisoned a few years ago. Monopolies are also illegal in the United States for the very reasons many of your are currently upset: back at the turn of the 20th century, the railroads, the oil companies, the steel companies, etc., were all owned by powerful figures: Carnegie, Rockefeller, J. P. Morgan. Because the average American couldn't afford to do much of anything under the prices set and owned by these individuals, the U.S. Government created several anti-trust laws to break up such competitive and unfair business practices. Be thankful that you cannot have market situations like these in GMS legally in real life.

Final quick-tip for all average MS players: knowledge is power, and the key to understanding economics actually rests in the chemical principle of Le Chatelier. Summarized in a general sense for application to all equilibira, whether chemical, finanical, or whatnot, the principle states that when a system at equilibrium experiences change, it will naturally shift to counter-act the change.

Understanding the application of this principle to financial markets is the first major step to understanding the inner workings of an economy at large.