Again you play with words, in fact 119% is also hyperinflation. But it is just one item - to know the inflation rate you need all the prices of all items, and every price shall have share of the whole basket of items proportional to the real demand for every kind of items. You have no such information. And in the first month after the release nobody cared about the legendary weapons in GW2.
Your thoughts about the financial system are absurd, sorry, but I will not comment them, you clearly have no idea what you are talking about. Even in games the value of the money is related to the supply and demand of goods, and the needs of the players. I bet you even have no idea what I'm talking about, when I suggest capital flow instead of put-sink system.
Now to get back on the topic. Why the game needs localization of resources. The reason is the same like that for the separation in crafting - competition and cooperation among the players. Local resources and prices will lead to competition among the regions. If the taxes and the rents for houses are managed from the guilds who control the castles, every region will attract traders and craftsmen in the competition with other regions. The prices of items and rents of houses will differs in different towns. The economy will be really players driven.
That is why the game needs players stores instead auction houses. Competition among the regions will lead to meaningful policies, meaningful wars, meaningful trade. Not just fight for the fight and some reward of silver, like it is now. The gameplay will be improved significantly. Players will have much more freedom of choices, because now they are pushed to play the game at few certain ways.
Secondly.. you said that GW2 had 800% inflation, not 119%, not 200%.. but 800%. I proved you wrong, stop trying to pretend like I didn't. Additionally, as I said.. the first few months of the game the economy is brand new.. it is VERY obvious that there is going to be inflation at the beginning until the economy stabilizes. A high school student with basic knowledge of the way the world works would be able to see that. I don't understand why you continue to insist that GW2 suffered from hyperinflation.. it is just becoming silly.
You keep throwing out very broad economic terms like "capital flow" and "put-sink system" (the later not even being an official term). Maybe you mean mutual fund flows or asset-class movement.. I'm not really sure.. but the terminology you are using is not used here in the United States to specify some mechanic of the economy. I am not an economist, but I did take classes on economy (I have a minor in business administration). Additionally, you have not given any counter-arguments. You consistently just say that "I am wrong" and "I don't understand".. you are just falling back into your old patterns that frustrated me in the first place. So do not be shocked if I do not take kindly to your words.
You keep saying "localization of resources".. which is another very broad term that could mean any number of things. In this case it seems you are referring to localized selling. First of all.. player stores do not promote competition between regions.. a player in one region doesn't know about a "player store" in another region unless they can see it listed. Sure, it would "promote competition" between two stores side by side.. but that is equally accomplished on the AH. There is competition in the AH.. you know.. when I list something for 1 silver less than someone else.. that is, in fact, competition.
"Policies, wars, trade" no one is going to war over the prices listed in a players store. Maybe you are suggesting that the only way you should be able to sell something is if you own a store in a city.. which can then be taken through war.. and I guess in that case there would be people "fighting" over it. But your expectations are unrealistic. That being said, I do not think BDO is what you are looking for, and even if it changes I don't think that will be enough to satisfy your needs.