I'll elaborate:  Your response was that your system prevents fully solvent competitors from stepping in and wiping out a currency that has just become insolvent, by the mechanism I described.  Namely, where the simple existence of the better positioned competition forces the market price of the currency below its target, and thus forces perpetual buying by the escrow fund until it's emptied.  My point is that there will always be competition from outside your constrained system that you must take into account, and as soon as the backing of a currency in your system drops below 100%, then it's automatically at a competitive disadvantage with any freshly created one in an outside system.