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A little over a week ago I wrote Bigger Picture: Linden Economy which referenced Matthew Beller's articleThe Coming Second Life Business Cycle. Some more though on these matters has come to light in Currency intervention in Second Life - Analyses and doomcasts (VERN) - it references both Beller's article as well as Randolph Harrison's The Linden Dollar Game.

Everything seems rather... pessimistic.

As the VERN author states at the end of the post:

...I think there’s good material in both of the analyses: they’re among the few transparent and analytical approaches to virtual economies I’ve seen so far. Both are quite pessimistic regarding the outcomes of currency intervention carried out by Linden Lab. If L$ starts to depreciate, according to one of the scenarios presented here or otherwise, I believe that Linden Lab will not start buying back L$ on a large scale – so an escalation to a major depreciation may actually take place quite easily.

All of that discussion had me think back to Aemilia Ballinger's comment:

...And when the average player leaves do they attempt to cash out or just forget about their money? I've found most average players in all games let their valuables sit unused when they quit a game. So, money is taken out of circulation when players quit, which should act as a counter to any inflationary impulses form Linden Labs so called deficit spending.

Revisiting what she wrote, I had doubts to my response. I looked at the economic statistics, and lo! Under 'L$ Sources and Sinks', 'Other' encompasses many things including money taken out of circulation from abandoned accounts.

So will Linden Lab have to buy back Linden dollars? Is that likely? It seems that even if they do, it may not work. It seems everyone agrees that there is a problem (other than Linden Lab), but... what's next?

¹ I know Eloise Pasteur has been talking to Meta Linden and others about statistics, perhaps this is relevant.