Apologies for my prose as I've been awake 27 hours. My understanding (which afair @smooth confirmed at bitcointalk discussion) is that our SP continues to earn the debasement rate I showed until it is actually converted to STEEM. So for as long as you see it still listed under your SP balance, then it is being debased as SP not STEEM. Also afaik powered down SP (aka VESTS) can be aborted at any time before it is actually converted to STEEM, but I personally haven't tried it yet. The debasement rate on STEEM is much worse and I will detail that in Part 2. It would have been too much to put in one digestible blog post.
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As a side note, this will show through increased payment amounts on your 104 payments. So, for example, if the rate of interest is 100% per year, your 52nd payment will be approximately twice the size as your first.
The payment amounts will not be assured to increase, as measured in a unit-of-exchange such as dollars. As I explained in my other comment response to you, you are sort of building a strawman here, because the increased money supply would cause the exchange price to decrease if the market cap will remain constant.
If you believe in money supply theory. an outdated economic philosophy that hasnt been taken seriously in a century.
Yeah, the value of a steem might go up. It might go down. I assumed that was a given.
Did you not read what I wrote in my blog. "such as in the often maligned Quantity Theory of Money". Obviously I am aware that the QTM is not in control of the price, i.e. there are other factors such as variable investor confidence, etc..
Then why did you assume it couldn't go down? I will quote you, "this will show through increased payment amounts on your 104 payments".
Thank you kindly for your timely response :)