The Psychology of Market Prices Part 3: When Politics Meets Production, The Paper Crisis

https://app.warera.io/country/6813b6d446e731854c7ac7eb

The Psychology of Market Prices Part 3

When Politics Meets Production: The Paper Crisis

Before we begin, a quick note: all observations, company counts, and market data referenced in this article were collected on 21 June at 00:30 GMT+7. As always, markets move quickly, so some numbers may have changed by the time you're reading this.

What Happened to Paper?

A little while ago, I was about to sell some Paper to the market, then I noticed something unusual.

The market price was sitting around 0.213 Coins. That immediately caught my attention.

Not long ago, Paper was trading closer to 0.160 Coins, so seeing it above 0.20 felt surprising. Naturally, I became curious.

What happened to the Paper market?

Not Long Ago, Paper Had The Opposite Problem

When Paper was first introduced, profits were extremely attractive.

Many players switched production to Paper, supply increased rapidly, and prices eventually fell. I actually discussed this in my previous article.

At the time, Paper became a textbook example of what happens when a profitable opportunity attracts too many producers. Prices fell, profits shrank, and the market gradually cooled down.

That's why seeing Paper suddenly surge back above 0.20 Coins felt so unexpected.

Then Something Changed

While checking Wealthrate, I noticed a sharp drop in the number of Paper producers.

On June 17, there were still more than 800 companies producing Paper.

By June 19, that number had fallen to around 400 companies.

Today, the number has partially recovered to roughly 600 companies, but that's still significantly lower than before.

Less production usually means less supply. And less supply often means higher prices. Suddenly, the recent Paper rally started making a lot more sense.

When Politics Meets Production

One thing that caught my attention was what has been happening in Türkiye. For a long time, Türkiye has been one of the major centers of Paper production. The country benefited from several advantages:

• Strategic resources boosting production.

• National bonuses supporting Paper manufacturers.

• The Fanatic Industrialist ruling party ethic, providing an additional 30% production bonus.

At its peak, some producers reportedly enjoyed total Paper bonuses exceeding 60%. Recently, however, Türkiye has been heavily involved in wars, revolts, and military operations.

One possible consequence of those conflicts was a shift in national priorities.

The previous administration appeared focused on economic growth and industrial production, while the current leadership seems more focused on military objectives and wartime efficiency.

As a result, Türkiye switched away from Fanatic Industrialist, sacrificing its additional +30% production bonus in exchange for ethics that reduce military and war-related costs.

The downside, however, is that a significant portion of Türkiye's production bonuses disappeared.

Today, Paper production bonuses in Türkiye appear to be closer to 20%, far below the levels many producers previously enjoyed. Some strategic resources may also have been lost as a consequence of the ongoing conflicts and territorial changes, reducing production bonuses even further.

If that interpretation is correct, the war may have indirectly affected the Paper market by making production less attractive and encouraging some producers to leave the industry.

One possible explanation is that these events were linked to political changes within the country.

Perhaps a change in leadership brought different priorities.

At the same time, the number of companies operating in Türkiye also declined sharply. According to SpyWarera.:

Earlier this week, there were roughly 295 companies operating there.

Today, that number is closer to 122.

Of course, this is only "my interpretation" of the situation.

I don't have access to the government's decision-making process, so I could be completely wrong.

But from an economic perspective, the timing is certainly interesting.

A Theory, Not A Conclusion

Could recent changes in Türkiye help explain that paper rally?

Maybe.

Maybe not.

To be clear, this is only my personal interpretation of the data.

I cannot prove that Türkiye is solely responsible for the increase in Paper prices, and there may be other factors affecting the market that I'm simply not aware of.

However, what caught my attention was the sequence of events:

• Production bonuses became smaller.

• The number of producers fell sharply.

• Paper supply decreased.

• Paper prices surged.

Whether these events are directly related or merely happened at the same time is difficult to know.

But they certainly make for an interesting theory.

Final Thoughts

The recent Paper rally reminded me of something important.

Markets aren't driven by supply and demand alone.

Politics can matter.

Wars can matter.

Government decisions can matter.

A change in production bonuses in one country can eventually affect prices across the entire market.

Sometimes, understanding a market requires looking beyond the market itself.

And sometimes, a war can end up affecting the price of something as simple as Paper.

What do you think?

Is Türkiye really behind the recent Paper rally?

Or is there another explanation hiding somewhere in the data?

@maddd