RE: As Steem falls, we're printing more of it.
Yes, this is very interesting indeed. The fact that we have a cap makes me worry a little less about weirdnesses coming from the feed price fluctuations, but it does seem odd that price fluctuations in STEEM would dramatically affect the rate of printing immediately, the higher the debt ratio is. It appears to affect the downtown more than the other direction I'd say, since as steem price goes up the debt ratio goes down accordingly.
I guess with conversions in place it makes sense to operate under the "worst case" assumption (for steem price) that it could all be converted overnight (3 nights) and we'd need to handle it accordingly though... I suppose the printing rate would be more stable against the virtual supply than the actual supply regardless of the conversion activity.... Not sure if that matters though.
When things get to 10% debt, then it all various smoothly I suppose, in terms of printing rate, so that seems good.
This stuff is pretty wild.
I'm still thinking things through, but I'm getting closer and closer to advocating a change where inflation is based on staked Steem rather than any measure of the universal supply. (Mostly for reasons other than this.)
Steem definitely has a bunch of interesting emergent properties. It reminds me a lot of early Minecraft, and I'm not sure which of our bits are the ones that are like the minecart physics, where "fixing" them to be more realistic made the game a lot less fun.