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Daily Econ Report
Day 1,217 • March 21, 2011

In this edition:
1. Currency Snapshot
2. Marketplace Snapshots for High Volume Industries
3. Historical price trends - Food
4. Today's Feature Article
5. Economic Community




Daily Economic Snapshots



Recent serious movements on the Currency Exchange are a history as the PHP, USD and CNY have settled in at a solid price point. Spreads have narrowed as well.

Marketplace Snapshots for High Volume Industries



We appear to have settled in at a price point aboust ~40% above those in the USA. This isn't good for ePH consumers and will be the subject of today's feature.

One bright point: Grain.



Much similar to price points relative to those in the eUSA, price points in comparison to those in eChina have settled in at a higher level.

Note the Grain competitiveness on price. This is in spite of the ePH having a grain region.




Historical Trends & Analysis

Here's the schedule for historical trends:
Mondays -- Food
Tuesdays -- Houses
Wednesdays -- Weapons
Thurdays -- Moving Tickets
Fridays -- Raw Materials

Q1 Food, Past 7 Days in gold

Q1 food currently rests in the PH at a premium of about 0.001 gold above that in the eUSA and eChina. Note the over 50% decline in pricing in the eUSA from five days ago.

Q2 Food, Past 7 Days in gold

After finding market parity with world prices, Q2 food prices are on the rise in the ePH over the past three days.

Q3 Food, Past 7 Days in gold

Q3 is subject to scarcity in the ePH, accounting for the crazy price line.

Q4 Food, Past 7 Days in gold

There is no Q4 food available in the ePH and hasn't been for over a week. If priced in proportion with Q1 food this is a market opportunity for an enterprising Q4 food producer.

Q5 Food, Past 7 Days in gold

Q5 food was priced well over 3 gold in the ePH, accounting for the slope of the line you see in this chart. Q5 food is overpriced in the ePH.




Today's Feature - Pricing with the World Market in Mind

A common theme has emerged in my Econ Reports that I hope readers have noticed - the economy is no longer about markets and countries as much as it is about the world market. Due to the (current) ability to hold as much stuff as you'd like the restrictions of the old economic module have been removed. Instead of having to choose between being limited to purchasing off your local market or having to undergo intensive and time-consuming purchase/donation cycles of raw materials in overseas markets, eRep citizens can now pick and choose from a wealth of markets.

How does this work? Well, if a price point in gold terms is lower on one market in comparison to others then it is now both very easy and very profitable to travel & purchase the product with the lower price in gold terms. This didn't really exist before, at least not for raw materials. But do to the ability to store thousands of units of raw materials it now does. Raw materials that you produce or purchase both go into the same storage "bin" in you citizen account. This means that those manufacturers that can cut costs in this manner will have a competitive advantage in both pricing and profit margin.

But let's say that the prices for Q5 weapons are 25% cheaper in the eUSA than they are in the ePH? If I had a method of obtaining enough USD (presumably through selling gold) I could easily purchase a Q2 moving ticket and travel to the eUSA and buy as many Q5 weapons as I could afford. I could then sell them on the ePH market at a price point (in gold terms) below the current ePH market offering but higher than what I paid for them. This is known as arbitrage and was what drove some people to conduct monetary market trading for profit.

Here's the funny thing about small markets - they require more active observation by consumers and producers alike. In the eUSA I could be lazy and price my product at or near the lowest price point and be assured that it was fairly reflective of the world market. This is mostly due to the velocity and volume of product that gets sold on the eUSA markets daily. The ePH and other smaller markets do not have this advantage. Becuase of this sellers must take extra steps to ensure that they are not pricing themselves too high in relative gold terms to the world market. This would result in slow sales and frustration. Conversely, pricing your products too low in relation to those on the world market will provide for an arbitrage opportunity for some luck individual.

With this in mind, I whipped up a pricing table based upon prices at server turn. This table provides pricing information to people selling product on the ePH markets. The first column is the relative pricing to that in the eUSA and the second is the relative price to that in eChina.

Relative Pricing as of 0:00 Server Time


If you produce in the ePH and are selling at a premium you are doing your fellow citizens a disservice! Gouging your compatriots will only lower our aggregate damage potential. If you are exporting to the ePH and pricing far above the relative world price then you are setting yourself up for slow movement of your goods.

Adjust to the new reality people. World pricing is where it's at.




Economic Community

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All things Economics chat:
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Articles Worth Reading

Today's Economics links:

NONE SUBMITTED

Stay dirty, piglets.




Small But Mighty

The ePhilippines can never match the total damage of a large country like the eUSA but rather can exceed her in per capita damage. It's like being Manny Pacquiao to the eUSA's Muhammad Ali. Both kick ass. But Manny Pacquiao is this generation's BAMF. Let's make the ePhilippines this eRep generation's BAMF.