Actually the 2nd comment is under the assumption that the owner would spend the earned CR into purchasing CE.
This is actually not exactly correct. Why? Because:
- diminishing returns as you mentioned; and
- having a very large holding on CE could draw unnecessary attention.
Remember the various previous exploits that allow some people to gain a ridiculous amount of CR and then the GM basically said "no harm done because the CR is recycled by Punch, therefore we don't take any further action"? If the owner uses the profit on Punch, it won't disturb the CE market as much. But it would give him an advantage in the UV market (and maybe LD also).
What the owner could have done though, is to invest that money into his own GH and threaten the establishment of existing guilds. (NJ, it's your turf, defend it rigorously.)
Those are some good points in your first comment, Eltia, but they really apply to alts in general. Your second comment relies on CE prices rising simply because there would be more crowns but completely ignores the effect of diminishing demand on the price of CE itself (What happens to the price of something when the demand for that good decreases?), nevermind the sources of supply, demand, their sinks and generators, all which I went through great effort to discuss in my former comments ... *sob* :'(