You should read the book The Creature from Jekyll Island and learn about how the Federal Reserve was created, what it is (hint, it's a private bank), who owns it, and what it has done over the past 100 years.
The federal government has some influence over the federal reserve, but it's advisory at best. Their deal is that fed allows the government to deficit spend as much as they want and in exchange the fed gets an cut of the interest on every dollar (which are federal reserve notes-- eg: debt.)
The federal reserve has not kept the USD stable, and is, in fact, financially incentivized to destroy the USD via inflation, and is busy doing so. They are obscuring this destruction by using the power to print dollars to buy treasuries at auction making it look like there is massive demand for such treasuries, keeping interest rates low. They keep interest rates low, which boosts government spending (Because its "cheap"-- at least in the short term) and this boosts fed income because they get the interest.
The bitcoin protocol was clearly made by someone who understood economics an didn't want to allow such a scam to be perpetrated on the public the way the fed has defrauded us of %99 of the value of the dollar over the past 100 years. (probably more like %99.9999 ... but I'm not sure how many 9s there are after the decimal.)
It's not a deflection to point to central banking-- central banking is the reason for bitcoin being the way it is.
While the Federal Reserve system has member banks, they only get a small slice (6% according wikipedia) of its profits with the rest going to the US Treasury. So it's not materially a private bank.
If the Fed is currently busy destroying the USD via inflation, it's doing a pretty poor job of it has kept inflation under 2% for quite some time now.
Congrats on completely ignoring how the Fed no longer publishing M3 data[1], therefore concealing all aggregate money supply, would completely distort[2] any later inflation numbers provided (such as the percentage you just listed).
Thanks, I'll add that to my reading backlog, but I think you hit the nail on the head for the problem with bitcoin.
You talk about the inflationary behavior causing the dollar to lose value over the last century, and that is absolutely intentional. A good currency is expected to experience a 1-3% annual inflation, in order to decentivize hoarding and remove barriers to cash flow.
Bitcoin is deflationary by design, and this is a key distinction to make. There is a definite future for an international cryptocurrency, but the implementation known as bitcoin is not it - exactly because of what you said, it is designed to be a store of value, not a currency. Many bitcoin evangelists will claim that theoretical soft forks can be made to solve this, by adding more supply and making bitcoin inflationary, but to do so requires 51% of miners to agree to it - which is irrational because it would devalue the miners' holdings and infrastructure.
Hence we're back at Bitcoin suffering from tragedy of the commons, which is by design as you point out.
And inflation is quite specifically the point, to encourage people to spend money (on buying stuff, on reinvestment, on whatever), instead of sitting on it.
When people sit on piles of money, it doesn't do anyone any good. It's not destroying the USD to keep that money moving around the economy, it's part of its basic deal.
I think that's a very key point that people miss with Bitcoin.
Bitcoin was designed to be a cryptocurrency that stores value, and because it is deflationary, bitcoin makes a terrible currency. The bitcoin forking scheme to fix this is controlled by people who profit from bitcoin staying deflationary.
The federal government has some influence over the federal reserve, but it's advisory at best. Their deal is that fed allows the government to deficit spend as much as they want and in exchange the fed gets an cut of the interest on every dollar (which are federal reserve notes-- eg: debt.)
The federal reserve has not kept the USD stable, and is, in fact, financially incentivized to destroy the USD via inflation, and is busy doing so. They are obscuring this destruction by using the power to print dollars to buy treasuries at auction making it look like there is massive demand for such treasuries, keeping interest rates low. They keep interest rates low, which boosts government spending (Because its "cheap"-- at least in the short term) and this boosts fed income because they get the interest.
The bitcoin protocol was clearly made by someone who understood economics an didn't want to allow such a scam to be perpetrated on the public the way the fed has defrauded us of %99 of the value of the dollar over the past 100 years. (probably more like %99.9999 ... but I'm not sure how many 9s there are after the decimal.)
It's not a deflection to point to central banking-- central banking is the reason for bitcoin being the way it is.