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I generally agree with most of the topic in regards to refined resources besides the food part.

I've got a hunch that particularly with the majority of nations around the 1500 to 2000 mark who do specialise in a particular refined resource that when the refined prices do rise, they will abandon all native production of food or at least minimise their negative deficit to an extent simply because it's a waste of slots given the potential revenues of  refined resource specialisation.  A lot of nations in this range dont even have the slots to spare on food production for that matter. Example below of an 1800 infra nation which if jumped to 2k infra would be able to minimise disease and specialise in 2 refined resources and be at a total food deficit

https://politicsandwar.com/city/id=87193

Nations shouldn't even be attempting to specialise in food production below 2250 infra and 2500-3000 land simply due to a few resources being better alternatives on the market and the slot requirements of food.

Still early days yet though I believe as more nations do specialise and the market stabilises at a post update norm, we will see food production become the "duty" of the  larger infra whale nations nations (2250 and beyond) instead of the upper tier generally (2000). This alone will lead to higher prices since instead of multiple hundreds of nations undercutting one another by a dollar competing  on the food market, we will see less nations regularly selling on the food market and therefore less undercutting which itself was a primary factor in determining the price of a resource pre-update.

Still early days yet though so will be exciting to see exactly what happens moving forward. Really all depends on how soon the market adapts and what actions each alliance takes with their constituent tiers. 

Edited by Nemesis
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to answer what Charles mentioned, I did help a couple nations get their new setup in order and I realized they too were able to make a nice balanced setup without the need of making food. This guys had 1800 infra.

the question is, how many nations have 2k infra or more and over 2500 land that will be overproducing food, if they are enough to sustain the food demand in the world, prices will stay, if they make more than consumption, prices will keep dropping, if they make less than consumption, prices will go up.

my guess is that the world will still make more food than what its consumed, so prices will still drop, but that is just a guess as I have no way to really see it.

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On 7/11/2017 at 4:16 PM, Seb said:

After this war, when our stockpiles have been spent, and we realize how scarce production can be, manufactures will become a very sought out commodity and therefore, it will be quite pricey. My educated guess is that they will triple its market value.

This is the problem.  When is that war going to happen, and what are the casualties going to be incurred?  If anything, people anticipating scarcity in the future will discourage that war from happening or aggressive tactics since people won't want to lose their stockpiles.  A self-fulfilling paradox of thrift will take place.

Until that happens, and if when it happens it doesn't happen effectively enough, demand will still be deflated.

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On 14/7/2017 at 1:56 PM, Dubayoo said:

This is the problem.  When is that war going to happen, and what are the casualties going to be incurred?  If anything, people anticipating scarcity in the future will discourage that war from happening or aggressive tactics since people won't want to lose their stockpiles.  A self-fulfilling paradox of thrift will take place.

Until that happens, and if when it happens it doesn't happen effectively enough, demand will still be deflated.

People will anticipate to this scarcity, they will build their stockpiles over the minimun requirement to ensure they don't run out when they need it the most.

that buildup along with the reduced production will naturally increase the prices.

as I predicted, all resources have increased, steel and gasoline being the main ones. While food has dropped.

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4 hours ago, Seb said:

People will anticipate to this scarcity, they will build their stockpiles over the minimun requirement to ensure they don't run out when they need it the most.

that buildup along with the reduced production will naturally increase the prices.

as I predicted, all resources have increased, steel and gasoline being the main ones. While food has dropped.

Eh... steel and aluminum are still floating around 2k.  I wouldn't jump to conclusions quite yet.  

If they're building up stockpiles, then demand is temporarily boosted right now.  Let's keep waiting.

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42 minutes ago, Dubayoo said:

Eh... steel and aluminum are still floating around 2k.  I wouldn't jump to conclusions quite yet.  

If they're building up stockpiles, then demand is temporarily boosted right now.  Let's keep waiting.

steel was 1700 ppu when I wrote this first post, so it went up 300

@Nemesis whats your opinion?

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Right now it's just a temporary lull, pressure on markets might be minimal right now , might see a tad more immediately before the next war , more likely during the next war and most certainly once the war ends.

Personally I think wars will occur with the same frequency , just won't last as long which will be similar to how wars operated a couple years ago when we didn't have the resource surplus we had till recently.  

The resource update has depending on nation size cut production by 50-66% generally speaking , the tax brackets update however to an extent can lessen the severe effects and it will be interesting to see the different ways employed by differing alliances in how they move forward.

I personally believe the pressure on steel however is less than it should be due to the sheer amount of nations in NA who are manufacturing and selling it as opposed to the other continents.

Edited by Nemesis

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I think its still way to early to tell when it comes to food, because there was such a huge surplus of food out there, and there has been for a while. 

So I think its going to be hard to really get a feel for it, my guess is probably for at least another month or so, or until the next global war when food production drops to close to 0.

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8 hours ago, Sweeeeet Ronny D said:

I think its still way to early to tell when it comes to food, because there was such a huge surplus of food out there, and there has been for a while. 

So I think its going to be hard to really get a feel for it, my guess is probably for at least another month or so, or until the next global war when food production drops to close to 0.

 

I agree, it's going to be awhile before we see the effects on food. The amount of nations who have stopped producing food entirely or have minimised production of it has been quite significant based on the top tier nations I have been looking at.

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I do wonder how many people have 2500+ land per city.  That seems to be about where food production is still profitable.  I still can't believe people would sell any raw resource for less than $2000 per now that you make so little each day.

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20 hours ago, Placentica said:

I do wonder how many people have 2500+ land per city.  That seems to be about where food production is still profitable.  I still can't believe people would sell any raw resource for less than $2000 per now that you make so little each day.

http://www.investopedia.com/terms/p/price_stickiness.asp

In a nutshell, rational choice takes time to process, and many people are too lazy to process it for themselves.  They'd rather learn from experience according to the rational choice of others.  

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On 7/22/2017 at 5:05 PM, Dubayoo said:

http://www.investopedia.com/terms/p/price_stickiness.asp

In a nutshell, rational choice takes time to process, and many people are too lazy to process it for themselves.  They'd rather learn from experience according to the rational choice of others.  

That is super depressing.  I feel like you just made a case against democracy.

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6 hours ago, Placentica said:

That is super depressing.  I feel like you just made a case against democracy.

Nah... I just made a case for licensing.  In real life, markets don't suffer from this because brokers are licensed such that we know they're constantly thinking about efficient market hypothesis.

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  • 2 weeks later...

I just wanted to point out the recent rise in prices is relative to the rise in input costs.  It doesn't have to do with the market appreciating information and calculating how to use it efficiently.

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Proportionally, the price of finished goods versus raw materials is actually less than it was before, so if anything, the market has become less efficient than before.  

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Or perhaps there are factors affecting raw resource production exclusively or to a lesser extent than the production of refined resources.

You do need to take into account that a significant amount of people do not buy raws but make their own and sell little raw surplus.

It isn't a clear cut assumption of simply comparing refined prices to raw prices, other issues such as supply and demand need to be taken into account. A whole variety of issues can affect the price of a commodity itself.

Edited by Nemesis

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The bottomline is there's a matter of optimal profitability for manufacturers.  Until the proportion of raw materials to finished goods reaches a breakeven point, manufacturers will be overproducing since they could make more simply from producing raw materials with improvement slots.  The amount of self-sufficient players has decreased due to the recent economic mechanics update.  This has been talked about before.

The problem is there isn't enough demand for finished goods since the world isn't militant enough.  In turn, we're only seeing a rise in absolute prices due to the increased difficulty of harvesting raw materials.

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Optimal profitability isn't the determining factor however. At the end of the day of people need these resources and they will either manufacture themselves or purchase them since the outcome if they don't is a significantly lesser war performance and perhaps defeat.

If by your example raws did become equal in market value to refined and nations could be more profitable just selling raws and we did see a large amount of nations just sell raws. Then we would see a decrease in refined resource supply and a further increase in refined resource market value since nations need refined resources no matter what the cost is simply to ensure efficient war performance. 

These refineds need to be made somewhere after all.

You are neglecting to factor in the impact of other market influences and focusing solely on the cost of raws vs refineds thus leading to a fatally flawed understanding of the game's greater economic outlook.

 

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The point of optimal profitability is you could buy more resources than you could make.  If all your manufacturing capacity was converted to raw material harvesting, then you would sell the raw materials and just buy finished goods on the market at a greater rate.  You would take advantage of other players' stubbornness against adjustment.  

You're presuming human nature's rationality in your second point there.  There is no reason to believe people must make efficient decisions or that efficient decisions should be made instantly.  That's why I referred to sticky prices before.  We should see the market adjusted the way you described, yes, but just because something should happen doesn't mean it does happen.  Sometimes, the mob is just plain stupid.  

(In real life, I'd argue this is why free markets are justified.  Rational people shouldn't be dragged down into unprofitable positions just because the masses insist on behaving inefficiently.  The point of free markets is to protect the rational from the irrational instead of letting the irrational regulate the rational out of envy.)

As for other market influences, they don't exist.  Let's not confuse the abundance of what we don't know with chaotic influences.  

The one exception to the rule here is if people are concerned about short-term adjustment costs from slight price oscillations since it costs resources to switch between manufacturing and harvesting.  You could argue that people are perpetually gambling in the moment in assuming prices will even out.  The problem there is prices have been out of proportion for so long and to such an extent that this doesn't make sense.  Anyone could have easily adjusted to raw material harvesting away from manufacturing, and made up the difference of converting back.

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Mate, if you have other influences to consider, then go ahead and explain them.  We shouldn't believe in imaginary forces that don't exist.

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