This post is going to introduce some basics of what a fiat currency is, how it works, and why it is important enough to be included in this game. This article will be a bit dense, but I will try to keep it as simple and straightforward as possible.
Fiat currencies (or fiat money) are imaginary units of value created and issued by a government which derives its value by the faith of a people in the competency and stability of said government.
In other words, it is funny money that gets value from you and I using it. It's like Monopoly, only on a far grander scale.
The fiat currency works by a dizzying array of complicated mechanisms only a handful of which will be modeled in the alpha and beta versions of this game, namely the exchange markets and the sovereign debt markets. These two, in simplified forms, will be sufficient to give players of FATES: Carpe Moerae the experience that only central bankers (like those at the U.S. Federal Reserve or Bank of England, etc.) receive.
The exchange markets operate by allowing individuals the capacity to turn one unit of currency from a nation into a set number of another currency from another country. Most of this exchange will be done behind the scenes in FATES: Carpe Moerae using a linear multiplier to compare all player currencies to one. From there, the computer will simply divide and multiply to display all pricing data in your currency in game, so the complexity should be minimal, at least on the surface. What you will notice, however, is the fluctuation -- sometimes extreme -- of prices as both your own currency and those of every other player on your server change in value.
The currency model, currently, is very simplistic, and will be expanded to more closely model real global finance as we go forward. At present, it operates on a simple algorithm. You can print money and you can spend it. When you spend it, the value of your currency goes down, meaning that one unit of your currency will buy fewer goods and resources. When you tax, trade, and invest, the value of your currency will go up by a set amount. In managing the process of spending and producing, you will be able to have control over the value of your currency. Will you choose to keep a highly valued currency and be able to purchase lots of resources for very little, or will you devalue your currency and be able to undercut market prices easily because of currency exchange rates? These are choices that you will need to consider in the long run if you want to be successful in FATES: Carpe Moerae.
The sovereign debt markets will be a bit more complicated and are not fully designed or implemented yet. The idea of sovereign debt markets is the players will be able to invest in their friends (or enemies) in order to facilitate growth or to create dependence scenarios to create leverage. The bonds will be redeemable at expiration for the base amount plus the interest rate on a given player's debt. The debt can be used in lieu of printing currency and can be demanded back at any point in time by the player lending the money. This will create a wide range of geopolitical scenarios and a means of producing, maintaining, and exerting leverage on other players in FATES.
We have tossed around other ideas in expansion to these two primary features, such as allowing federations to issue currency and subsume the responsibilities from individual players to the federation leaders, much like how the European Monetary Union works.
Ultimately, though, this will be a grand experiment to see how each player manages their economy and finances and see how these elements play out in the player psychology and interactions between players. In learning to identify and manage their own currency value, players will get a good feel for how fiat currency works in the real world, and hopefully become more prudent about voting with regards to the dangers that fiat money presents to a society.
It will be interesting, for sure.
á na márië,
gumshoe, out
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