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Extreme Devaluation of the Neopoint


by sensei_fuzzy

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NEOPIA CENTRAL - If I told you I was going to give you something worth one million Neopoints right now, what would you pick: pure Neopoints, an item worth one million, or one million in various stocks?

Hopefully you won't respond with an answer right away, but instead ask what item and what stocks. But if you picked the Neopoints, let me pose a different question: if you had to leave Neopia for the next two years and could pick one of the above to have before you left, what would you pick? Are you still picking Neopoints? Because if you are, that might not be so wise. Let me explain.

I was looking through some old issues of the Neopian Times and stumbled across a few on the effects of inflation and deflation in our Neopian economy. One of them used the example of a codestone changing in price from 3200 NPs to 3000 NPs. My initial reaction was, "codestones were once that cheap?" And suddenly I remembered the "good ol' days" of map pieces being under 20,000 and non-solid paint brushes being buyable in shops (I got a Disco Fever Paint Brush for about 60,000 three years ago). And then it occurred to me - why didn't I buy a paint brush or something and then bury it in my safety deposit box, never to be seen until it's worth twice what I paid for it? The answer? Because I'm already doing that with other items. So is every other Neopian out there. Those items are called Advent Calendar items.

For as long as I've been around, anyone with an account can sign on each and every day during Celebrating, go to Happy Valley, and pick up an item and a sackful of Neopoints. Woo hoo. So during the month of Celebrating, everyone can get a little richer, right?

Right?

Of course not. If you did get richer, I wouldn't be writing this article and would instead be playing today's featured game so I could get a few quick Neopoints even quicker. The reason you don't get richer is because I'm picking points and an item up too. And so are most of your Neofriends, and their Neofriends. So how is it getting richer when everyone is receiving the same amount? It's a wonder that those daily advent items aren't totally worthless by now... and, yet, I still have them stockpiled in my deposit box.

So, getting back to my point, think about how many Neopoints you earn daily and how many you just get. Then think about everybody else and how they're stopping at Coltzan's Shrine and Tombola daily the way you are. Does that make you rich?

Still not getting it? Okay, so how about this: I give everybody I know a chocolate bar everyday, as long as they come to me asking for it (I don't actually, if I had that much money, I'd be spending it on me, not on my friends). Let's leave everybody else in the world out of this example: all that exist are my friends and me. So how much is a chocolate bar worth? Could one of my friends really be able to sell another friend a chocolate bar? And if they did, don't you imagine yet another friend would step in and offer it cheaper? So after a while, if there's one or two people wanting chocolate bars, there's enough supply that those chocolate bars can be really cheap. Especially since tomorrow, everyone will get one more.

That's why advent items are so inexpensive. If you really want a second one, shopkeepers are in greater competition with one another to give you the cheapest possible, since everyone got that item for free. Of course, there's an exception to something like a paint brush distributed in the Calendar: you can do something with it. Therefore, it will probably increase in value. Or... will it?

Let's go back to the idea that you're getting free Neopoints from the Advent Calendar. And so is everybody else. Just like the chocolate bars, if everybody has one, they're not worth as much. Don't you think that's what's happened with Neopoints over the years? Codestones have nearly doubled in price since I started playing, and paint brush prices are ridiculous: if you want your pet in a nice color, there's almost no chance you'll be paying under 100,000 to get them in that lovely shade you so desire. These rising prices may be in part due to the increasing demand of said items, but the greater reason of ludicrous prices is lack of value of the Neopoint.

So what's wrong with the devaluation of the Neopoint? Everyone gets to share the wealth, it's not that big a deal. Wrong-o. What happens to you, the poor, unsuspecting Neopian that hasn't been around for two years? Your million Neopoints are worth a great deal less. And if you wait ten years or so, a million will probably be equivalent to today's 100,000 Neopoints, if not less.

So what do we do about this mass inflation and falling of the Neopoint? Well, we have to vary our assets. I would recommend paint brushes, and weapons and codestones (stockpile for the next war now while supplies are cheaper). Earlier, I mentioned the possibility of stocks: but if you think about it, Neopian stocks are glorified Neopoints. The way to do well in the extreme long term (two years) in the stock market is to invest in a little of everything in the Neodaq. Of course, since the Neodaq as a whole rarely fluctuates a great deal in price, those Neopoints would be just the same in a bank account, except without the perk of collecting interest. I suggest that if you're going to leave for a while, get rid of your Neopoints, and put the money into something that will retain its value better. If you really like the comfort of cash, then fine. Hold on to your precious Neopoints, but only on the condition that you stick 'em in the bank and collect your interest religiously. That way, they might actually be worth something in ten years' time.

And, if you want a chocolate bar, come back tomorrow.

 
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