WoW economy inflation

MMO economics are complicated, because the supply of gold and materials are infinite, only the labor is finite. Anyway I have noticed that on my little horde char, my wife and I play on Earthen Ring. Previously we couldn't get much money at all on that server; things such as skins and herbs just would not sell. I started playing again this week, and noticed that now just about everything sells, and sells well. I made 150g in an week at level 40. I don't brag, this isn't alot. (Faradhim claims that he has close to 2000g and doesn't even have a level 70 character).

But still, the fact that the economy seems to be greatly stimulated is a huge thing for us. Now we can afford our level 40 mounts, buying new stuff on AH, and generally have more fun. In the past, we were severely limited by having very little available cash.

My theory is that there is a trickle down effect like so: Level 70s with epic mounts have so much money they dont know what to do with it. So they invest in powerleveling new professions and powerleveling alts, using the AH to level up cooking, first aid, and crafting professions. This drains all the stuff that lowbies have been trying to sell, and gives us more money to play around with (and donate to blizz via repairs and mount expenses).

So, yes, there is a huge influx of gold, the root cause of inflation. But there is right now also a large eflux in the shape of newly purchased mounts and powerleveled professions.

My thought is that once Wraith hits, we won't be able to (or wont have desire to) do the dailies any more, thus removing the gold source, and giving many sinks (powerlevel professions). For example I can just imagine that enchant past 375 would cost 10g per point initially. You'd have to buy the mats from AH and those level 70 greens sell for about 10g. So that right there is a huge sink. There will probably be another level 80 mount that costs 10,000g or something ridiculous. Anyway, Wraith will fix the inflation issues.