Thread: New Guns Shop?
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Old 02-08-2011, 08:03 AM
Demisis_P2P Demisis_P2P is offline
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I understood your point but it just doesn't make sense.
My point was that the price that people associate with these guns is way off because you can't actually buy an MP5 and the other rare guns are priced relative to the MP5.

Example:

The largest polished diamond in the world is the Star of Africa.
It is part of the the Crown Jewels and is estimated to be worth $400 million.

Now if you saved up $400 million and offered to buy it they would obviously say no.
Word gets around that you offered to buy it for $400 million and that your offer was rejected, so people logically conclude that it must actually be worth more than $400 million.

So you save up another $50 million, and you offer to buy it for $450 million, and again they say no.
So now people assume that the diamond must be worth even more than $450 million.

But you could keep saving and keep offering more and more money and they would always say no, because there is nothing that is better than the Star of Africa, so even if they had all of the money in the world they could only buy diamonds that are worse than the one they already have, and why would they want worse diamonds?

So every time you make an offer it seems like the price is going up.

Now imagine if a guy has some other diamonds that are exactly a quarter of the size of the Star of Africa, and he wants to sell them so that he can save up and eventually try and buy the Star of Africa for himself (he has a reason to sell), so he prices them accordingly; at one quarter of the "price" of the Star of Africa.

They start at $100 million each. After your first offer is refused and the "price" of the Star of Africa goes up he decides that since his diamonds are still a quarter of the size they should still be a quarter of the price, and he puts his up to $112.5 million. And then after your second offer he increases the price of them again to $125 million.

So even though the supply nor demand of either item has changed, because the money supply has increased and the smaller diamonds are priced relative to the Star of Africa they also increase in price for no apparent reason. And this could continue forever, because the Star of Africa is actually priceless but nobody has realized it yet.
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