Banking money with interest

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zandyy
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Post by zandyy » Mon Jan 21, 2008 2:35 pm

As an economic unit, there is money coming into the game, money coming out of the game, and money exchanging hands between managers. All that really matters is what the totals of each of these are, not the names of each of the functions. For example, money leaves the game through salaries, agent fees, interest payment, firing compensation, etc. When people suggest other means of reducing money in the game, it does not matter what name they give it (merchandise shop, natural disasters etc) – all that matters is whether the overall objective is to reduce the money supply in the game or not. If it isn’t, then whatever fine ideas there are, each idea that decreases the money supply will have to be counterbalanced by an idea that increases the money supply in approximately the same level, and vice versa.

Renitsa:
You are right of course that interest payments here are just an expense, and that interest on savings will be marginal overall, but it does serve to balance the interest payments in the most natural way possible. As for your other idea – increased transfer fees – following the logic above, it is nothing but an idea to reduce the money supply. With lack of reason to do so, I fail to see the logic behind it.

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Post by renitsa » Mon Jan 21, 2008 2:39 pm

zandyy wrote:As an economic unit, there is money coming into the game, money coming out of the game, and money exchanging hands between managers. All that really matters is what the totals of each of these are, not the names of each of the functions. For example, money leaves the game through salaries, agent fees, interest payment, firing compensation, etc. When people suggest other means of reducing money in the game, it does not matter what name they give it (merchandise shop, natural disasters etc) – all that matters is whether the overall objective is to reduce the money supply in the game or not. If it isn’t, then whatever fine ideas there are, each idea that decreases the money supply will have to be counterbalanced by an idea that increases the money supply in approximately the same level, and vice versa.

Renitsa:
You are right of course that interest payments here are just an expense, and that interest on savings will be marginal overall, but it does serve to balance the interest payments in the most natural way possible. As for your other idea – increased transfer fees – following the logic above, it is nothing but an idea to reduce the money supply. With lack of reason to do so, I fail to see the logic behind it.
The idea of the increased transfer fees was to reduce the gap between lower and higher divisions in the long run and increase competition overall.
Also, to make the game rely less on speculation and more on strategy.
Moreover, it will not lead to a decrease of the money supply, if the percentage of the commission paid to the agent remains the same as it is now, and just the commission paid to the previous team increases, but increasing the percentage paid to the agent may be a useful tool to combat inflation, if needed.
And I believe increasing the competition and complexity of the game are both important objectives.
Finally, the idea was explained in detail here: http://forum.soccerproject.com/viewtopic.php?t=110229

To the other subject - the bank deposit option - I only attracted attention to the fact that sbroccoli was not totally right and that there will be a slight increase of inflation through the measure proposed. I don't care if this is implemented or not, since I will never use it and it won't have a big effect overall.

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SBroccoli
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Post by SBroccoli » Mon Jan 21, 2008 2:59 pm

renitsa wrote:
SBroccoli wrote: You hit the head on the nail, my friend. In economic theory savings actually decrease inflation if the interest is under the average market growth.
In theory that is correct and now I can see what you mean. However, you missed an important detail.
This game's economy is different from the natural economy by the fact that it does not rely on an interest system, meaning in truth the interest variable as you regard it is 0.
No, no.

An economy in growth will always have an interest. The interest is essentially 'the price of money'. Just because there's no bank offering savings doesn't mean there's no interest.

The interest is e.g. what players take into account when they consider if a player transfer intended for a later sale is optimal or not. It's not just about earning money, but to earn money faster than the average so you can advance. When you buy a player, you sink capital into an asset which has to yield a profit in the long run.

There's a problem in the SP economy, however, because money is introduced into it with no consideration to the capital market effects, but even if this serves to lower the market interest (since the supply is potentially endless), there's an internal interest in as well the clubs as on the market.

You could e.g. calculate the interest of money invested in a clubs' players. Players act as assets just like gold or furniture ;)

So there's a market interest allright and it would likely fluctuate together with the inflation - a number that we don't really know either.

If Sjarel would publish the cumulative figures of the economy in SP, that would be rather interesting. :shock:
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renitsa
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Post by renitsa » Mon Jan 21, 2008 3:26 pm

SBroccoli wrote:
renitsa wrote:
SBroccoli wrote: You hit the head on the nail, my friend. In economic theory savings actually decrease inflation if the interest is under the average market growth.
In theory that is correct and now I can see what you mean. However, you missed an important detail.
This game's economy is different from the natural economy by the fact that it does not rely on an interest system, meaning in truth the interest variable as you regard it is 0.
No, no.

An economy in growth will always have an interest. The interest is essentially 'the price of money'. Just because there's no bank offering savings doesn't mean there's no interest.

The interest is e.g. what players take into account when they consider if a player transfer intended for a later sale is optimal or not. It's not just about earning money, but to earn money faster than the average so you can advance. When you buy a player, you sink capital into an asset which has to yield a profit in the long run.

There's a problem in the SP economy, however, because money is introduced into it with no consideration to the capital market effects, but even if this serves to lower the market interest (since the supply is potentially endless), there's an internal interest in as well the clubs as on the market.

You could e.g. calculate the interest of money invested in a clubs' players. Players act as assets just like gold or furniture ;)

So there's a market interest allright and it would likely fluctuate together with the inflation - a number that we don't really know either.

If Sjarel would publish the cumulative figures of the economy in SP, that would be rather interesting. :shock:
So, what exactly do you propose?
If I understand rightly, you should address this on a separate topic.

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SBroccoli
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Post by SBroccoli » Tue Jan 22, 2008 9:58 am

Ehm...no. This thread is about making savings with interest available. I support that, provided the interest is kept at the right level.

All the rest was just wet dreams about analysing the macro economy of SP. I'll consider a seperate topic for that some other time.
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renitsa
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Post by renitsa » Tue Jan 22, 2008 1:39 pm

i looked at an older post of yours and saw that you propose the money should be tied up for the period in bank. my assumption about this option was that you can retreat the money should it be necessary. since you can pay early the loan, it would be normal to be able to take the money back, at an interest penalty.
your assertion of decreased inflation through this measure does make sense if you cannot touch the money and the interest is lower than player speculation return. in that case, capital that could have been invested in players is kept in the bank in a investment of lower efficiency than the player trading business. which means the money amount grows slower than it could have grown been compared to the market size, and indeed less inflation.
but if you can touch the money and invest it at any time, then it is different. now, if there is a surplus of money, it stays at the team and doesn't circulate, until you want to invest in players. then, it will stay in the bank and won't circulate, until you want to invest in players. however, if it stays long enough, it will bring some money that it doesn't bring now. so, the average "efficiency of capital" will be higher than now, but only for the teams with money to spare. the money increase would be higher than it could have been compared to the market size, and thus it would lead to higher inflation.
anyway, as i said before, i don't think that, with a limited amount to put in bank (say 2.5 mln max), and an interest as low as 2.5%, it will make a significant difference, but it may be an interesting option for some.

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gerben
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Post by gerben » Thu Feb 07, 2008 7:27 pm

let every team spend maximum 5 million on the bank, so for each team (a-H) the intrest will be the same, no rich teams getting richer. make it with a fixed time period (you cant use the money on a bank account for 1-2 seasons). so you better dont spend all the money on it. now the lower teams are strugeling with buying better players. bigger teams, have money, they buy all the youghtplayers for every price (more than an G-H team can pay) when the player is fully trained they sell him, for a high price which only bigger teams can pay. with the bank account your money get more value, you get more so you can easely buy better players
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SBroccoli
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Post by SBroccoli » Fri Feb 08, 2008 10:07 am

I see that we now agree on the economic effects, Renitsa.

As long as the savings interest is under an average speculation interest, it would decrease inflation - regardless of the savings are frozen for some time or not.

The effect would be rather small, but remember that the objection against this suggestion initially was that it would increase inflation. SO by this reasoning I think we can say at least that objection isn't valid.
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terry
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Post by terry » Fri Feb 08, 2008 6:26 pm

It's very simple: the inflation will increase always if you put a bank with interests in the game!
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Dark Tiger
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Re: Banking money with interest

Post by Dark Tiger » Wed Feb 13, 2008 1:30 am

Denhaerinck wrote:Now you can already loan money to the bank when you need
some money urgent.

Would it be nice that you can place an amount on an bank account
en receive after a wile an interest of some pro cents.
I feel the same.

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SBroccoli
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Post by SBroccoli » Wed Feb 13, 2008 12:29 pm

terry wrote:It's very simple: the inflation will increase always if you put a bank with interests in the game!
Lol. You missed the entire discussion of the thread, I think?

It explains why it doesn't have to be like that.
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