PSA: The pegging mechanism for steem backed dollars is not sustainable

We are told that SBD are supposed to be analogous to corporate debentures. Unfortunately, being unbacked, they are economically unsustainable.

Essentially, Steem releases two infinite-supply tokens, namely STEEM and SBD. In this scheme, SBD is supposed to track USD in this way: We measure an external feed of STEEM/USD and we adjust the release schedule of STEEM/SBD to match that.

This plainly cannot work, because the only mechanism available consists in increasing, never decreasing, the montetary base of SBD:

• SBD value goes up: release more SBD to dillute it. 
• SBD value goes down: release even more SBD, in the form of interest rates (which are actually a debasement, not an interest).

I already showed a chart of SBD's instability in my previous post. But, OK, it is still in the beginning, an maybe it has not stabilized. So let us see bitBTC instead, which is a long-established very similar pegging for BTC. As you can notice, it very roughly tracks BTC price, but with huge swings and no stability at all:

Steem "backed" dollars are not backed and are not pegged to dollars. The last to cash out would be left as bagholders.