The queue for the West Wing Cafeteria was unusually long this Thursday, but the students were not lining up for cinnamon buns. They were attempting to liquidate their assets.
What began as a controlled experiment in monetary policy by the [ECO-BUS] Economics & Global Commerce track descended into a chaotic, real-time lesson on market psychology and regulatory failure, resulting in the temporary suspension of the student-run currency, the “AuraCoin.”
The Experiment: A Closed-Loop Economy
The initiative, supervised by Mr. James Sterling, was designed to teach Year 12 students about liquidity traps. For five days, the college allowed the Economics stream to issue a digital token, the AuraCoin, which could be exchanged for snacks and hot drinks at a fixed peg. The goal was to observe how interest rates—controlled by a student “Central Bank”—affected spending velocity during the darkest month of the Finnish year.
“The theory was sound,” Mr. Sterling explained. “We wanted to see if raising the interest rate on unspent coins would encourage students to save rather than spend. In a textbook, this works. In a high school cafeteria in November, it does not.”
The Arbitrage Attack
The flaw in the system was not economic, but mathematical. On Tuesday, a group of students from Dr. Andrei Volkov’s [MAT-FUR] Further Mathematics class noticed a lag in the exchange rate algorithm.
While the Economics students were manually updating the “inflation index” once per hour based on sales data, the Math students realised they could buy coffee vouchers at the start of the hour and sell them back to the “Bank” at the end of the hour after the price had adjusted for demand.
Led by Year 13 student Elisa Virtanen (no relation to the founder), the Math stream executed a ruthless arbitrage strategy. They bought hundreds of coffee vouchers, created an artificial scarcity, waited for the algorithm to hike the price, and then sold the vouchers back for a 15% profit in AuraCoins.
The Crash
By Wednesday afternoon, the coffee vouchers were technically valued at 400 AuraCoins each (up from 10), and the “Central Bank” was insolvent. The cafeteria ran out of physical coffee because the Economics students had failed to account for supply chain velocity, assuming demand would remain elastic.
“It was a classic hyperinflation spiral,” admitted Tommi Laine, the student Governor of the Central Bank. “The Math students broke the trust in the currency. Once everyone realised the coins were losing value against the coffee, panic buying set in. We tried to raise interest rates to 50% to stop the bleeding, but nobody cared. They just wanted caffeine.”
Faculty Intervention
The experiment was halted on Thursday morning by Dr. Volkov and Mr. Sterling, who declared a “Bank Holiday” and dissolved the currency.
While the Economics students were initially despondent about the collapse of their model, the faculty viewed the chaos as a pedagogical triumph.
“You cannot teach panic from a whiteboard,” Dr. Volkov noted, appearing visibly amused by his students’ exploit. “My mathematicians found a logical loophole and exploited it. Mr. Sterling’s economists failed to regulate the market. Both sides learned a painful lesson: mathematics is absolute, but markets are emotional.”
Aftermath
Normal service has resumed in the cafeteria, with transactions returning to Euro cards. However, the legacy of “The Great Coffee Crash” remains. The Economics department is currently drafting a post-mortem report titled “Rational Actors in an Irrational Environment,” while the Math department has framed the printed code of their arbitrage script in the hallway—a trophy of the week they beat the bank.
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