Reserve Currency

Talk and plan things about the game with other players.

Should there be a 59th currency with a value that floats?

Yes; nations would be discouraged from cheating.
17
61%
It is okay to include it in the spreadsheet, but I will use one of the static currencies.
5
18%
No; allow nations to cheat by inflating their GDPs.
6
21%
 
Total votes : 28

Re: Reserve Currency

Postby Imperial Dark Rome » Wed Aug 14, 2013 5:55 pm

Siggon Kristov wrote:
Imperial Dark Rome wrote:
Siggon Kristov wrote:The difference between static currencies and dynamic currencies (when it comes on to cheating)...

Right now, Davostan cheats. Their spending is 726.2% of their revenue, which means they are in significant debt. Their debt is almost 80% of their GDP. This doesn't stop them from topping the rankings of almost every chart when things are listed in static currencies.

When a static currency is used, their debt and deliberate inflation don't affect their currency value:
- Their GDP is 10.67% of the world, and they're ranked #1
- Their Total Government Spending is 27.89% of the world, and they're ranked #1
- Their Defence Spending is 68.07% of the world, and they're ranked #1

When the KRV is used, the value of their currency is reduced to reflect their extreme debt and deliberate Mugabe-like inflation causes them to be Terra's Zimbabwe, so:
- Their GDP is 1.12% of the world, and they're ranked #53
- Their Total Government Spending is 3.56% of the world, and they're ranked #4
- Their Defence Spending is 16.89% of the world, and they're ranked #1


I feel I should give an update on the situation in Davostag. The current crazy budget was not my doing. While my budget did have a very high defence budget, I did keep a small surplus and was not in debt.

I've been recently flooded by not one, not two, but three idiot noobs that know nothing, and no I'm not calling them idiots just because I don't like them, but they are really are stupid beyond belief. They don't know what or how the budget works they don't know what the debt is. I didn't have enough seats to block their budget. Oh, and when they do talk about the debt they refer to it as the "depth", and in another bill about legalization of cannabis they think cannabis is cannibalism. Hahaha! They are unfortunately stupid beyond help. At least I can get alot of laughs watching them. It's like I've got the three stooges here. When I eventually regain control, the budget will return to normal. Well, normal for Davostag anyway... I hate that Davostag is considered cheating right now, when I worked hard to balanced that my last budget. Argh!!!

Also a weird thing is that I have the cabinet position for the minister of finance but one of them is able to keep making budget proposals. Very weird. I wasn't planning on complaining about it until they slash defence budget. Since to me, a unrealistic insanely high defence budget is better then a realistic but too low defence budget. Hahaha...

Thanks for bringing this back on topic.
Yeah, anyone can propose Finance bills (even without holding the Finance Minister position). The only thing that's restricted to specific ministries is making press releases. With the KRV, your Defence spending would still be the highest in the world, but your GDP and total government spending wouldn't.


Well g*dd*mn! Been here for eight years and still learning new sh*t here... Now I'm the idiot... (facepalm).
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Re: Reserve Currency

Postby Siggon Kristov » Thu Aug 15, 2013 1:59 am

Let me just repost this since the original post disappeared from the thread. IdioC is too busy right now, especially after having to delay some stuff to deal with a few surprises.

--

The difference between static currencies and dynamic currencies (when it comes on to cheating)...

Right now, Davostan cheats. Their spending is 726.2% of their revenue, which means they are in significant debt. Their debt is almost 80% of their GDP. This doesn't stop them from topping the rankings of almost every chart when things are listed in static currencies.

When a static currency is used, their debt and deliberate inflation don't affect their currency value:
- Their GDP is 10.67% of the world, and they're ranked #1
- Their Total Government Spending is 27.89% of the world, and they're ranked #1
- Their Defence Spending is 68.07% of the world, and they're ranked #1

When the KRV is used, the value of their currency is reduced to reflect their extreme debt and deliberate Mugabe-like inflation causes them to be Terra's Zimbabwe, so:
- Their GDP is 1.12% of the world, and they're ranked #53
- Their Total Government Spending is 3.56% of the world, and they're ranked #4
- Their Defence Spending is 16.89% of the world, and they're ranked #1
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Re: Reserve Currency

Postby EEL123 » Thu Aug 15, 2013 7:57 am

You could also put out explicit inflation/deflation figures for each country. That'd be interesting to work with.
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Re: Reserve Currency

Postby Siggon Kristov » Thu Aug 15, 2013 2:20 pm

EEL123 wrote:You could also put out explicit inflation/deflation figures for each country. That'd be interesting to work with.

They're already in the spreadsheet.
Inflation was at 79.43% for Davostan when I posted this:
When a static currency is used, their debt and deliberate inflation don't affect their currency value:
- Their GDP is 10.67% of the world, and they're ranked #1
- Their Total Government Spending is 27.89% of the world, and they're ranked #1
- Their Defence Spending is 68.07% of the world, and they're ranked #1

When the KRV is used, the value of their currency is reduced to reflect their extreme debt and deliberate Mugabe-like inflation causes them to be Terra's Zimbabwe, so:
- Their GDP is 1.12% of the world, and they're ranked #53
- Their Total Government Spending is 3.56% of the world, and they're ranked #4
- Their Defence Spending is 16.89% of the world, and they're ranked #1
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Re: Reserve Currency

Postby Afrocentric » Thu Aug 15, 2013 2:24 pm

Are we ever going to do credit ratings?
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Re: Reserve Currency

Postby Siggon Kristov » Thu Aug 15, 2013 2:42 pm

Afrocentric wrote:Are we ever going to do credit ratings?

Yes; PaleRider and I will start.
You said you wanted to as well, and I asked if you wanted me to make a dynamic RUT or not. After all, the static currencies ignore inflation/recession and debt.
Siggon Kristov wrote:
Afrocentric wrote:I think Rutania will form their own institution as well. After all, the Ruta is a reserve currency.

Should I make a dynamic RUT as well? Or will you do it based on static RUT ratings?


I have to wait until after August 23 before any of this, though. By that time, I'll start recording Lodamun's surplus/deficit as many months as possible, and tabulating it. I'll want all nations to do the same, as we would credit (not necessarily through the credit rating, but PaleRider was suggesting that) nations that record their Finances properly.
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Re: Reserve Currency

Postby Afrocentric » Thu Aug 15, 2013 2:52 pm

Siggon Kristov wrote:
Afrocentric wrote:Are we ever going to do credit ratings?

Yes; PaleRider and I will start.
You said you wanted to as well, and I asked if you wanted me to make a dynamic RUT or not. After all, the static currencies ignore inflation/recession and debt.
Siggon Kristov wrote:
Afrocentric wrote:I think Rutania will form their own institution as well. After all, the Ruta is a reserve currency.

Should I make a dynamic RUT as well? Or will you do it based on static RUT ratings?


I have to wait until after August 23 before any of this, though. By that time, I'll start recording Lodamun's surplus/deficit as many months as possible, and tabulating it. I'll want all nations to do the same, as we would credit (not necessarily through the credit rating, but PaleRider was suggesting that) nations that record their Finances properly.


Ohh you can make it dynamic.
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Re: Reserve Currency

Postby Siggon Kristov » Thu Aug 15, 2013 3:23 pm

Afrocentric wrote:Ohh you can make it dynamic.

You'll need a branch of KFS in Rutania.
And how would you use it? Do you even use the spreadsheets?
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Re: Reserve Currency

Postby EEL123 » Thu Aug 15, 2013 9:15 pm

Shit, 79.43% inflation? That sounds like Zimbabwe/Weimar Republic.

The only thing is that for more accurate inflation figures, you'd need to know what the interest rates are like.
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Re: Reserve Currency

Postby Siggon Kristov » Thu Aug 15, 2013 9:28 pm

EEL123 wrote:Shit, 79.43% inflation? That sounds like Zimbabwe/Weimar Republic.
The only thing is that for more accurate inflation figures, you'd need to know what the interest rates are like.

Not necessarily. I did Macro-Economics, and there are various formulas for calculating each thing.
For inflationary/recessionary gap, the formula involved comparing the Potential GDP to the GDP.
With the variables available in Particracy, my lecturer agreed that the best way to calculate it is by adding the surplus to (or subtracting the deficit from) the GDP, since those would be the only things that represent how much it's inflated or recessed. I already spoke of all of this:

Siggon Kristov wrote:New Categories...
I made some new categories in the Macro-Economics spreadsheet:
- Inflation
- Recession

According to my Econ notes...
- if your nation is undergoing inflation, you should increase taxes and cut government spending (this will cause consumption and government spending to both go down, thereby increasing your GDP). This cuts aggregate demand, so price levels in your country can be lowered.
- if your nation is undergoing recession, you should decrease taxes and cut government spending (this will cause consumption and government spending to both go up, thereby decreasing your GDP). This boosts aggregate demand to speed up your economy.

I checked the stats to see if it made sense, and yes, it can work in the game.
The nations, which cheat, have a lot of government expenditure, and not enough taxes to support it. The cheating works because they deliberately inflate their GDP (beyond the maximum potential GDP) through government spending, without taking any money from consumption, in other words: the government is able to spend, without taking money from the citizens. They end up in debt. If they increase taxes, their GDP will return closer to Potential GDP, since Consumption will be lower.
Some nations are in recession. Their GDP is much lower than their Potential GDP. In the game, this is a result of the government collecting revenue (through taxes) without spending it. When your government taxes the citizens, it lowers Consumption (which is a part of GDP). The only way to put it back is through government spending. If the money isn't spent by the government or citizens, it will not contribute to the GDP. Avoid having a large surplus. It is as bad as a deficit.


Siggon Kristov wrote:If you have high taxes, ensure you also have high spending, our your GDP will decrease significantly.
You can only control 2 components of the GDP in Particracy:
- Consumption
- Government Spending

Higher taxes mean lower consumption. Lower taxes mean higher consumption.
When you rob money from consumption, through taxes, ensure you put it all back through government spending.
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