Tether will implode, taking down all prices and many exchanges with it.
Many economies have imploded in their futile attempts to maintain currency pegs.
Don't be like those other economies. Learn from their lessons.
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There is some truth to this statement as well because I tend to favor the peg but I see the reality of trying to control the "beast".
To me, the difference here is we're using STEEM to do it, not some made up currency we print out nothing. If the STEEM supply goes down to create more SBD to cover demand, then in theory the value of everyone's STEEM goes up. In a way, it's still somewhat of a closed loop between STEEM and SBD. The only difference (again in theory) is that value shifts away from SBD into STEEM (or the other direction) whenever SBD is not in line. The thing which keeps this in place is individuals taking advantage of an arbitrage opportunity via the smart contract conversion. It's hard for me to see where the cost is to do this, other than for the speculators who buy or sell too far outside of the $1 peg range.