I don't think the problem is the guy holding 100,000 bitcoins,  the problem is the guy holding $21,000,000 USD (currently $7.5 million) to state that he will support the price at 1 dollar per BTC.

In order to support the price you need the dollars to support it with.   I personally don't have 21 million USD in my pocket to pay everyone 1 dollar per BTC.

I didn't read the rest of your proposal because the last thing I want is for a central bank to frak up Bitcon but you are aware central banks currently do exactly what you outlined in the second paragraph (something you think is impossible) in fiat currencies.

For example the Federal Reserve can increase the money supply by printing money and then using that to buy treasury bills.  Since as you indicated something out of circulation is just as good as destroyed this in effect generates money from nothing and destroys a treasury bill (from the viewpoint of the economy outside the Fed's balance sheet).

To do the reverse the Fed sells Treasuries from its balance sheet and hold dollars.  Technically since it can create infinite amount of dollars at will on its balance sheet it doesn't hold them it simply removes them from the economy.  The supply of debt grows raising interest rates and the monetary supply shrinks raising the value of the dollar.

I removed the first line from my post because it was in error.

I was essentially advocating trading bots that allow wide, but tweakable price swings (with a year-long time-frame in mind) . If most bitcoin holders do the same thing, volatility should be reduced.

The point of trying to enforce a deflation target is that rapid climbs in price lead to bubbles, and make bitcoin look more like a ponzi scheme (even though it is not). If large bitcoin holders simply strategicly release coins when the price says there is demand, wild swings can be avoided. Conversely, crashes represent an opportunity to buy back in cheap, while at the same time supporting the price.

Didn't the bold "Decentralized Central Banking Proposal" hint my choice of words was deliberately provocative? My proposal combines the role of a central bank with the role of a free market.

I think part of my point is that the manipulators are there anyway. We (as in bitcoin holders, which I am not yet one) might as well set a soft floor and ceiling.

If the price really wants to keep climbing even after new old coins are put back in circulation, there is not much anybody can do to stop it. However, if the price spike is simply caused by a surge of interest after a news article or something similar, there is no need for the price to spike dramatically. Similarly, if Bitcoins really are worthless, any buy walls proping up the price will be pointless. However, filtering out flash crashes may be useful.

If you mean regulation, no. Regulation is the end-result (not the cause).

I am advocating a cartel of bitcoin holders willing to risk token ammounts of fiat and bitcoin in order to absorb wild swings in the price of bitcoin. For the most part, the day-to-day swings should be left alone for day traders to play with.

The problem is that the day-traders don't plan for the long-term. I outlined a strategy that allows the people that really want to buy and hold to encourage more predictable growth. For the start-up phase, the target may be to keep anual growth between 0 and 10,000%. After the block-reward drops, it may be prudent to half the growth target as well, say between 0 and 5000% anually.

Anual growth of 1000% or more is stupidly high. I just don't think it would be sustainable. Since I don't expect the weighted average price to rise more than that much per year, I would set my buy and sell walls accordingly. As Death and Taxes pointed out, I have no way of enforcing that expectation. However, I think bitcoin adoption would be encouraged if wild price swings were avoided.