Creating the ability and opportunity for 'Safe Haven Assets' via Gold and Silver.

[CrowCargo]

IRL people have the option to invest in precious metals as a hedge against inflation. inflation being when the spending power of a dollar going down over time due to there being more money in circulation, so where as a loaf of bread may have cost $1 30 years ago it now costs $3. The loaf of bread is the same nutritionally, but in terms of $$ it now costs three times as much. in a healthy economy the average individual earns enough to be able to sustain themselves and a reasonable amount on top to save or spend on luxury goods. We have seen houses being the best example of Safe Haven Assets in the server, case in point being 4g houses that were in the $300/400K budget two years ago, now being in the $1.5 Million+ range in todays market, and similar increases across the board for houses of all other sizes too. This creates a large gap for many people who are priced out of those now inflated investment markets.

I have spoken to support staff and a moderator about this and made the following suggestion to them, which they reccommended i post here. My proposal is this, I would like to open and maintain a Precious metals buying business. The foundation of this comes with the addition of the mines, and would require creating a small chance of rare nodes spawning containing Gold, Platinum, or Silver, with Gold being the rarest spawn chance, followed by Platinum and then more commonly but still rarely, Silver. Players who successfully mine the ore, would have the opportunity to take it to the Precious metals company, and could either pay to have it refined to an ingot, or could sell it to the metals company who would then refine it at their own cost, and then sell the ingots to buyers/ investors.

Each day there would be a 'Spot price' which would fluctuate by small percentages (this could be deemed by a bot, a script, or by admin based on the economy) that being a daily buying and selling price for unrefined metals per gram/ troy oz, and for ingots of 999.999 purity per gram/ troy oz.  It could also be scripted in that jewelry such as Chains, watches, etc can be bought in different Karats and therefore with different prices, and melted down into Ingots as well., a 9 karat chain weighing 16.965 grams (37.5% pure gold 62.5% alloys) would be worth half that of an 18 karat chain (75.0% pure gold 25% alloys)  of the same weight. Jewlery would be considered luxury items which are more expensive than their 'scrap value' to purchase new, and could allow criminals the opportunity to steal them and have them melted down for cash. There would be a testing process in game, for all metals being bought in either using a file and testing acids, which would detect 'fake' or even 'plated' items or by using an XRF Scanner to check the exact purity of metals brought into the shop.

an example of the testing and weighing process with testing acids would look like this

/me picks up the chain and begins filing it discretely with a steel jewelers file.

/me applies a dab of 50% concentrated nitric acid to the chain

/do the acid reacts with a green fizz      (this would signal the chain is a fake, and not gold)

or

/do the acid would react with the chain leaving a dark brown spot  (this would indicate the chain is 9 karat gold)

or

/do the acid would not react with the metal  (this would indicate that the chain is above 9 karat gold but not specify which karat above)

if the last option was a success, ( no reaction from the 9ct gold acid) then the next /me would be

/me applies a dab of an aqua regia mix of 50% concentrated nitric acid mixed with 50% concentrated hydrochloric Acid

and /dos would follow the same practice as above with the following results dependant on the each karat of gold it proves to be.

14ct / 15ct* dark over a period of a few seconds (could be as quick as 1 - 2 secs or as slow as 3 - 6 secs)

18ct Yellow* quite quickly (can be as quick as 3 - 6 seconds or as slow as 8 - 15 seconds). The important factor is that it turns yellow, and that it does this quite quickly, in a few seconds.

 22ct Yellow* as above but much slower (varies from 15 - 30 seconds, to 30 - 60 seconds)

24ct Yellow* if very nearly 24ct, it will take 1 to 3 minutes to change colour. If 24ct, it remains clear.

 

Alternatively if that is too much of a wall of text then it could be shortened using a XRF Scanner such as

/me applies the XRF Scanner to the chain.

/me after a few seconds the scanner beeps to confirm the reading.

/do it would read gold plate not detected.  'Au 75.0' 18 Karat.

/me places the chain onto the digital scales

/do it would read 16.965 grams

 

this could be used on all precious metals, with the results of the scan including their elemental symbols as neccessary.

The shop would have the ability to refine the objects into bars, via a script  and the advantage to owning them would be that they are easier to store in quantity due to their shape and purity of 999.999% aka 24 Karat

 

Not only would investing in metals offer people the potential to store wealth and sell it when the price is above the price they paid for the ingot/s originally, but it could be interesting to have a system of storing wealth in a tax free manner, I.E. physically owning ingots would not contribute to your tax bracket, so should you buy $30k of gold, then the item would not count towards your asset value in the way houses or cars do, as it would be privately owned, and not spendable, but tradeable and offering no other use outside of sotring it and investing as a hedge against inflation. Ingots themselves would also be able to be traded and or stolen, again offering a new dynamic for criminal RP, and offering an incentive for people to keep their ownership of them quiet, and confidential as to not attract attention to them or conversly allowing people who have protrection to lavishly display their wealth in public too.

 

Location:

my propsed location would be the vinewood Pawn and Jewelry shop, as it seems to have the most fitting exterior that i have found so far.

The interior would be comprised of an 'air lock' style entrance with a lockable door followed by a counter with bullet proof glass, meaning that any metals coming in would be placed through a tray beneath the window, to the service counter, where the testing/ refining process would take place and the customer would be payed in cash should they choose to accept the offer, or the metals could be returned to them should they decline the offer.  the building would be rgulated with CCTV too, in order to protect the premesis, and record the id's of anyone entering the shop.

 

The store would be run on a 5% profit margin on each transaction - refining services, buying in metals, and selling them again.

 

This might be waaaay to much to impliment, but on the contrary it may well work just fine.. I'm interested to hear what others think,

[Jasmine]

I think a way to counter the inflation seen by recent boons in player participation would be good. Boats, jetskis, houses, supercars, are were very cheap a long time ago, and have skyrocketed because of growth, or by simply removing supply while allowing items to stay in the market (supers, boats, jetskis).

The only issue I see is how the metals price would be determined. You could use the housing market as the benchmark, as that seems to be the best indicator of the economy, although right now metal prices would actually be decreasing. 

If metals slowly inflated over time, it would eventually devalue other items, particularly cars and houses (provided the market stabilizes or goes down). Holding onto precious metals would be the safest and best investment. Which I suppose is the point. The choice with your cash at that time would be to risk the housing market or take the guaranteed, but maybe slower, growth of gold. 

So, I guess my concern would be player X buys 100k in gold now. And disappears off the server. Comes back 6 months later and his gold is now worth 300k, but the prices of cars, items, and potentially houses are still where they were 6 months ago. Also, base income and gov income will not have changed. 

TL/DR: I think for this to work, there would have to be inflation across the board, cars, items, salary, gov check. etc.

OR the prices of metals is determined strictly by the housing market, and used as a way to hedge housing inflation (which seems to be the only true population-based inflation, the rest was artificially created by Dev changes)

 

[cheatonus]

+1 since we're taking about metals having this somehow tie into mining would be neat, but not strictly neccesary.

[KeistuoliZ]

+1

[Luke Raven]

+1

[Brandon Powers]

1+ if you can buy and own the metals freely, not just through a business. Because in real life, anyone is able to buy as much as they want in most parts of the world.