Weekly market report - what's up with gold? Literally.

Day 1,663, 05:47 Published in USA Canada by Wilhem Klink


The week in a nutshell: prices steady, gold wacky.

Raw materials hold rock solid for the week leaving the Raw Material Index even at 28.89 for the 16th straight day.

Food prices trade in a narrow band, essentially holding the line on price. The Food Index is nearly unchanged, up 0.83 for the week to 70.71.

Weapon prices have improved slightly in Q1-Q5s. Q6 have steadily dropped but the overall decline is slight. The Weapon Index moves ever-so-slightly up 0.08 to 70.89.

Wages drop off their all-time high from last Saturday pushing the Wage Index down to 103.73.

Gold. The story of the week. Despite a gold sale of 30% more gold for the money (which should push prices of gold down, at least temporarily), gold has surged to its highest levels this past week. Bear in mind one important factor on gol😛 its a world-wide market. Each country has its own market for food, weapons, wages, etc. So if a player is in the eUSA he or she is selling against other players with eUSA citizenship or those who have bought a market license to sell in the eUSA. With gold, however, every player sells to every country. The eUSA gold market, for example has the top 5 offers doming from Serbia, Indonesia, Taiwan, Former Yugoslavian Republic of Macedonia (too damn long), and Hungary. One can only speculate why this is, but it occurred during the reset of the currency to have just one country currency. A buyer of gold competes with every player in the game, not just those in their own country.

And compete they have. Gold has pushed past 2200cc, 2300cc, and 2400cc levels before settling just under 2400c at week's end. The Gold Index pushes its way to 144.46, meaning gold is closing in on 50% more expenseive that it was 63 days ago.
The Index:


Note the flat-line prices for wages, food, weapons, raws, and then the climbing line for gold. Youch.

The 1600 AU Index
Based off of the amount of gold a player could earn in a year by working at market wage, selling 20 weapons, 200 food (both Q6) and 1750 raw materials (split 50/50 food/weapons) the 1600 AU Index gets pummeled as gold increases 10.7%.



On Day 1600, a player could buy 451 gold over the course of a year bu selling 20 Q6 weapons and 200 Q6 food per day and by working at market wages each day. Today that player can buy 216 gold, less than half.

Value Added Tax (VAT)
Much is written in the real world about taxes. The Laffer Curve holds that at some point raising taxes 1% would actually decrease the tax brought into the state. We know that eRepublik is immune to most of the real world governance of supply & demand. There is no disincentive for a player NOT to produce from a company they already bought.

Say The 1600 Index owns 5 Saltpeter mines, each producing (in the eUSA) 350 units of raw material. On day 1600, when weapon raw materials sold for .23cc each, the 1600 Index could make $402.50 per day. Now at .07cc each, the profit is a mere $122.50. But its still profit. A player may not want to buy a new saltpeter mine, but there's no reason (disincentive) to not work ones they already have.

Bearing that in mind, does taxes make a difference? The eUSA has a 1% VAT on weapons, and neighboring eCanada has a 12% VAT, and nearby eIreland 25%.
Producers sell the item for more in higher taxed countries do they can still recover enough profit. But since a player is free to move globally (having only the travel tax to pay) that player can buy in low tax countries and avoid the higher market cost in their own.

This is getting wordy, so here's a chart:



The chart shows several things. Lets look at the eUSA section. There are several offers of Q6 weapons on the market (26.70, 26.71, etc). Each price, we note the number of weapons offered at that price. The 1600 Index continually monitored the market for 20 minutes and noted the number sold. Then the 1600 Index calculated the VAT take to the country and the wealth that passed to the people.

You'll note a few things:
1) high-tax eIreland didn't sell one Q6: net to country: 0.00cc
2) similarly-sized and modestly taxed eCanada sold 13; net: 45.61cc
3) eBulgaria (similar in size to eUSA) sold 188 but netted 547cc
4) eUSA was hopping, sold 1,012 netting 270cc in taxes, but passing 26,700 on to its citizens (or licensees).

Cavets: this isn't scientific; the countries are different in size (the eUSA has more prople selling & more people buying than eCanada does); its only for 20 minutes during one part of the day.

Still, if one lived in eIreland and needed to buy 50 Q6s, would you buy them for 30cc in eIreland or jump over to the eUSA and save 3.30cc each Q6 which (even assuming 80cc in net moving costs) saves you 85cc? Even eCanadans can save by buying in bulk at the eRepublik version of Costco, the eUSA. Even assuming 40cc in moving costs, one only has to buy 17 Q6s to make the trip a net savings.

Travel a little, save a lot.


A closer look at market movements:


Weapon prices have returned to a fairly tight grouping (relative to Day 1600's prices). Q6 has drifted down a bit (as previously mentioned) but still commands a higher percent of its Day 1600s price than the other levels.Q2 has resumed its spot as the second-best, but not by much.

Foo😛


Q1 & Q2 have stepped out of the pack and moved in lock-step for a few days.

Note: prices are reflective of a percentage of Day 1600's price (Hence the "1600 Index"). In other words if an index is quoted at 88, that days price is 88% of the price on Day 1600. Except the 1600 AU Index which represents an amount of gold one can buy given market conditions as noted in that section.

Methodology on prices: prices are taken at 3:00 eRep time. The price is the average price of buying 1,000 Raw materials, 500 Food, 100 weapons (at each quality level), and 8 gold, plus the market wage less any fraction of cc (so 240, rather than 240.1). All qualities are standardized to Q1 (per hit or per health).

Sic transit gloria mundi