Have you ever thought that in fact collateral approach multiplies a money supply by 2?

I.g. if USD has a value then USDT backed with USD  also has value - then it means that both have a value and therefore you have existing USD money supply +  newly created USDT money supply

This way I can back USDTT with USDT and say that USDTT is backed with USDT an so on
USDTTT backed with USDTT
USDTTTT backed with USDTTT
USDTTTTT backed with USDTTTT
USDTTTTTT backed with USDTTTT

and with your philosophy they all will have a a value but they wont

This is why 99% of ICO tokens can't retain even its initial capitalization that equals to amount of ETH spent , cause you create another supply  - not replace existing one

But in my case we burn one supply and create another in another form and even in another place. I burn 1 ETH and emit 3500 USDx - the total value does not change