Recession, depression, inflation, deflation, panic! If you're anything like
me, an avid Neopian Times reader and shopgoer, chances are you've heard at least
one, if not all of these terms. In just a few short paragraphs, you are going
to learn how the Neopian economy affects YOU.
First, let's go over the terms, and keep the definitions simple.
Recession - A general 'slowing down' of the economy. Means: People
buy less from shops, fewer Neopoints go around, causing prices to go (mostly)
down, people that have invested in items or stocks lose money.
Usually: Not good, but not too bad if temporary.
Depression - A severe and/or long-lasting recession, often resulting
in decreased business activity, falling prices, and unemployment. (The last
doesn't really apply, as long as the faeries keep the employment agency open.
;) )
Means: People buy much less from shops, fewer Neopoints go around, prices
go down a lot, people that have invested in items or stocks lose money, badly.
Usually: Really bad. Fortunately, this rarely happens.
Inflation - An increase in the price of items, indicating a decrease
in the purchasing power of money/Neopoints This is usually due to items becoming
more scarce, or Neopoints becoming overabundant.
Means: Prices go up, things cost more, people that have 'liquidated their assets'
(Sold stuff for Neopoints, now you can impress all your friends) lose money.
Usually: A small rate of inflation, over time, is good. High rates of inflation
are bad, leading to runaway prices.
Deflation - A decrease in the price of items, due to money/Neopoints
becoming more scarce or items becoming more abundant.
Means: Prices go down, things cost less, people that invested in items lose
money.
Usually: Bad.
Panic - What you do when your mom catches you writing articles like
this one at 3 A.M.!! (Just kidding.) A reaction of people to any of the above,
that causes harm. For example, if one of your stocks drops two points, and you
go sell off your entire portfolio, that would be a panic reaction.
Means: Lots of people do something in reaction to a change, making the condition
worse.
Usually: Bad. Really, really bad. This can wreck economies, and turn
a slight recession into a depression.
Congratulations, you made it through the terms! Wait! Don't leave, yet! Just
listen to a quick, easy plan for keeping yourself out of a pickle should any
of the above happen.
First, find a way to make Neopoints It doesn't have to be a lot, just a game
that you like, or maybe your shop. There are dozens of articles on how to make
Neopoints, so go read those.
Second, save a set part of what you make. I'm highly conservative, and save
60% of what I make per day. Don't go out and throw ALL of your Neopoints into
buying one paint brush, or a Wand of the Air Faerie. Nearly all of the time,
it will still be there when you can afford it easily. If you want to save as
little as 10% of your earnings per day, that's your decision, but it will take
much longer to get a large stack of Neopoints or a pile of good items.
Third, don't put all of your Neopoints into any one investment. Quite a few
people have to learn this the hard way. Don't invest nine-tenths of your savings
into stocks, because the stocks could crash, or (even worse) go bankrupt, and
you could lose a lot. Don't put all of your NP into items, either. You never
know when the staff will open up another game or attraction. Dubloons and Codestones
are a great example, as people who had invested in Codestones got their easy
chair ripped out from under them when Dubloons were introduced.
Fourth, have fun! You can't take all of this too seriously, or you'll
wind up as wrinkled and haggard as Edna!
Note: The author was turned into a Puppyblew for 18 hours for making that
last comment.
Disclaimer: If you DO end up as wrinkled and haggard as Edna, it's your
own fault for worrying too much.
*ZZZAP!*
Oh, great. This time, I'm a Moltenore.
*stampeding sounds*
AIEE! COLLECTORS!! SAVE ME!!! |