The Sith and money

[FTeik]

The Sith and money

Somebody at another board was wondering about the costs for the clone-army in AotC and from where the Sith got the money to buy it.

This lead me to the following thought:

Suppose thousand years before TPM Darth Bane invested a million credits. The average interest achived is 6%. After thousand years the account should be worth 2.02*10E31, a two with thirty-one zeros.

Now the question is: Nobody could have prevented the Sith from doing that every year, but if they did they should have enough money to actually buy the galaxy. So why didn't they do just that? (This part of the question is only half-serious).

The second question is, since money only has value when there are goods to buy with, wouldn't the Sith have more money than there are goods after 1,000 years (and assuming they invested a lot more, than just one million)?

[Gunhead]

Me and my friends sometimes wonder about where the money came for the clone army. Now we figured the senate must have a budget, and being a galactic senate it must be pretty big, it should be that difficult to lose a few million credits a year into a bureaucratic limbo. Do this for say 20 years and you can buy yourself an army.

-Gunhead

[Mange]

I suggest that you read the novel "Labyrinth of Evil" where the background to the transactions etc. is explained. Read also "Cloak of Deception" in which those events referenced in LoE takes place.

[FTeik]

You two only read the first sentence and ignored the rest, right?

I did NOT ask, where the money for the clone-army came from.

I asked the following:

Suppose thousand years before TPM Darth Bane invested a million credits. The average interest achived is 6%. After thousand years the account should be worth 2.02*10E31, a two with thirty-one zeros.

Now the question is: Nobody could have prevented the Sith from doing that every year, but if they did they should have enough money to actually buy the galaxy. So why didn't they do just that? (This part of the question is only half-serious).

The second question is, since money only has value when there are goods to buy with, wouldn't the Sith have more money than there are goods after 1,000 years (and assuming they invested a lot more, than just one million)?

[Crown]

Now the question is: Nobody could have prevented the Sith from doing that every year, but if they did they should have enough money to actually buy the galaxy. So why didn't they do just that? (This part of the question is only half-serious).

What about inflation? 1 credit 1000 years ago could have been worth 1E17 credits today, or somesuch thing. Add to the fact that the galactic standard monetary system might have changed and re-assessed.

[Gunhead]

Yes Fteik, I ignored you... But it's all Manges fault... He/She/It made me do it.

Just stashing money away would not be a very good idea. Like Crown said inflation and other factors really eat into it.
Remember in Fandom Menace. Qui-Gon had 10,000 Cr and it could buy him jack shit.
So ok they were in backwater hicktown, but it should have gotten him something. From the dialogue I'm suspecting Qui considered 10K to be a lot of money.

Money stashing could work if you have someone to manage it and convert it into something solid before it loses it's value.

-Gunhead

[Ghost Rider]

But no, let's come up with something conspiratorial, because ummmm...we have to explain their wealth other then Palpatine was saavy in business affairs.

I mean for crying out loud...it's not like anyone BUT Palpatine came up with this incredibly large and grandious plan in the last thousand some years, what the fuck would they need future wealth

Just in case a really bad rainy day of depression?

And like Crown said...inflation. Snowballs the idea even harder.

[Mange]

You two only read the first sentence and ignored the rest, right?

I did NOT ask, where the money for the clone-army came from.

I asked the following:

Suppose thousand years before TPM Darth Bane invested a million credits. The average interest achived is 6%. After thousand years the account should be worth 2.02*10E31, a two with thirty-one zeros.

Now the question is: Nobody could have prevented the Sith from doing that every year, but if they did they should have enough money to actually buy the galaxy. So why didn't they do just that? (This part of the question is only half-serious).

The second question is, since money only has value when there are goods to buy with, wouldn't the Sith have more money than there are goods after 1,000 years (and assuming they invested a lot more, than just one million)?

No, and the reason to this is fourfold. First of all you wrote that the first part of the question was half-serious so I totally ignored it. The second question is quite uninteresting as it wouldn't matter how much money the Sith would have without any political influence (of course, it speaks for itself that money can lead to power, but that's not a guarantee in a galaxy with the Lord knows how many wealthy individuals and corporations) but I don't have a clue as to what you were fishing for. Of course, the Clone Army could've been ordered without any political influence, but then it wouldn't be of too much for the Sith. The third reason is Gunhead's fault. He/she/it made me skip it as he posted before me (I'm a he btw ). The fourth reason was how you opened your post:

Somebody at another board was wondering about the costs for the clone-army in AotC and from where the Sith got the money to buy it.

This lead me to the following thought:

This made me think that you wasn't aware of the explanations offered in the books I refered to.

[FTeik]

Alright, but the Galactic Republic has been stable for at least thousand years - considering this i would argue, that there hasn't been much of inflation. Perhaps the term "interest" was misleading, but i don't know the english term for the annual money made by a stock-investment in relation to the original investment. For a good company it should be a little more than 6%.

Of course the possibility of such a "sheme" to profit from a long-time investment, where the time is really long isn't limited to the Sith, but those would be one of the few groups/circle of persons patient and foreplanning enough to pull it off. Members of long-living species like the Hutts could try to do something similar.

What i was going at was probabely "how much do the Sith own" and "what can they achive with it"?

[Kurgan]

Use the Force to play the Stock Market.

Force Get Rich Quick Power!

[Fw 190]

According to the Star Wars Technical Commentaries, there has been zero net inflation over the past 4,000 years. Unless there was a correction in the EU or elsewhere, I don't see how inflation would be a problem.

Governments divert money from programs all the time. It is not hard to imagine where the money for a clone army came from. It could have come from Palpatine's pocket too.

Question 1: You could make the arguement that any person/family/planet could do the same thing and be super rich. For some reason it does not happen.

Question 2: Same as question 1.

[Trogdor]

Well, for question one, I don't see why one Sith would put money away so another Sith could use it a million years later. A Sith Lord generally cares only for himself, and doesn't really give a fuck what will happen to successors, with the possible exception of his immeditate apprentice. I mean, look at all the backstabbing in the Sith Empire. You think one of those people will make a nice portfolio for a million years later?

[Adrian Tullberg]

Well, for question one, I don't see why one Sith would put money away so another Sith could use it a million years later. A Sith Lord generally cares only for himself, and doesn't really give a fuck what will happen to successors, with the possible exception of his immeditate apprentice. I mean, look at all the backstabbing in the Sith Empire. You think one of those people will make a nice portfolio for a million years later?

Wasn't that the point of Bane's reformation of the Sith? To make sure it survived, and it's future members would someday be powerful enough to destroy the Jedi and take over?

[Darth Fanboy]

Suppose thousand years before TPM Darth Bane invested a million credits. The average interest achived is 6%. After thousand years the account should be worth 2.02*10E31, a two with thirty-one zeros.

A few problems I can think of:
-If the account went unclaimed or inactive for a certain amount of time then it would be considered abandoned and either the insitution or the government would get to claim it (depending on law).

-Six percent seems to be an awfully high rate, unless you are using the SW equivalent of a mutual fund.

-If you are using the mutual fund then you aren't guaranteed to make money, the fund can lose money as well.

The second question is, since money only has value when there are goods to buy with, wouldn't the Sith have more money than there are goods after 1,000 years (and assuming they invested a lot more, than just one million)?

Well there's always the fact that brand spanking new technologies and miniaturized tech are fairly expensive. Maul's Sith Infiltrator must have cost heaps. But a more reasonable explanation for Sith Wealth I think is the fact that Sidious had the Trade Federation in his pocket. They had more than a few credits.

[Jalinth]

Suppose thousand years before TPM Darth Bane invested a million credits. The average interest achived is 6%. After thousand years the account should be worth 2.02*10E31, a two with thirty-one zeros.

A few problems I can think of:
-If the account went unclaimed or inactive for a certain amount of time then it would be considered abandoned and either the insitution or the government would get to claim it (depending on law).

-Six percent seems to be an awfully high rate, unless you are using the SW equivalent of a mutual fund.

-If you are using the mutual fund then you aren't guaranteed to make money, the fund can lose money as well.

The second question is, since money only has value when there are goods to buy with, wouldn't the Sith have more money than there are goods after 1,000 years (and assuming they invested a lot more, than just one million)?

Well there's always the fact that brand spanking new technologies and miniaturized tech are fairly expensive. Maul's Sith Infiltrator must have cost heaps. But a more reasonable explanation for Sith Wealth I think is the fact that Sidious had the Trade Federation in his pocket. They had more than a few credits.

A 6% real rate of return (after inflation) is extremely high for a risk free investment. Look at T-Bills and then subtract off 1.5% to 2% inflation. Really small real return on investment.

Also, the government is eventually going to ask - who is earning billions of credits without paying income tax. Places that don't charge income tax (outside the Republic) are also less reliable - after all, if your account is stolen by Hutt's second cousin, do you thing Jabba is going to care. And convertibility has become a major problem given that 10K in credits was useless. (I personally found this somewhat odd in a galaxy where travel is so easy and short. Its like saying that no one in Canada would accept $US under any circumstances. They might really rip you off on the conversion to local currency, but someone should be willing to take them.)

[Crazedwraith]

Yes Fteik, I ignored you... But it's all Manges fault... He/She/It made me do it.

Just stashing money away would not be a very good idea. Like Crown said inflation and other factors really eat into it.
Remember in Fandom Menace. Qui-Gon had 10,000 Cr and it could buy him jack shit.
So ok they were in backwater hicktown, but it should have gotten him something. From the dialogue I'm suspecting Qui considered 10K to be a lot of money.

It wasn't the amount it was the currency. He had 10k republic credits and Tatonieene is not in the republic thus republic credits arn't accepted.

[Darth Fanboy]

It wasn't the amount it was the currency. He had 10k republic credits and Tatonieene is not in the republic thus republic credits arn't accepted.

Watto said he wanted something more real, I took that to mean something more along the lines of gems or precious metals rather than any sort of currency.

[Darth Fanboy]

A 6% real rate of return (after inflation) is extremely high for a risk free investment. Look at T-Bills and then subtract off 1.5% to 2% inflation. Really small real return on investment.

Makes you wonder whre the six percent thing came up in the first place eh?

Also, the government is eventually going to ask - who is earning billions of credits without paying income tax.

Perhaps if it was shielded or there was some book cooking within a major organization like the Banking Clan, which is another organization that a Sith could have had dealings with prior to the Clone Wars same as the Trade Federation. Only remote possibility I could come up with.