I'm not sure you can start a new currency from scratch, and succeed, without extreme volatility. If it increased in value by a steady five percent a year it'd still be worthless in twenty years. The low volume is a function of it being new, not of it being a bad idea.

Aside from that, I thought this was an excellent rebuttal: http://www.reddit.com/r/NonAustrianEconomics/comments/hputj/...