[Taek]

If people used Bitcoin the same way they used the USD, it would be much more stable as a currency.

Right now market liquidity on Bitstamp (I think that's the biggest exchange?) is 3 million per day. If you want to trade and buy $3m of Bitcoins, you're going to have a huge impact on the price. This is not an unreasonable transaction for larger parties and investment firms.

I don't know what the liquidity on the USD is, but consume an entire days worth of trade volume between USD and say, the Euro, you pretty much have to be a small country.

A lot of these fluctuations will smooth out greatly as Bitcoin's actual use and liquidy goes up. If investment firms and hedge funds start giving serious attention to Bitcoin, you'll see it approach a stability closer to that of gold. Still not the USD standard of stability, but a lot better than what it is today.