Using the "velocity of money" to measure inflation is dangerous. To illustrate my point, consider somebody at a ski resort measuring the velocity of snow coming down the mountain. So a big snow-storm hits, and the snow sticks, and so the velocity of snow coming down the mountain is very slow. Then another big snow storm hits, and once again, the snow sticks and the velocity of money is very slow. Maybe at this point, the people measuring the velocity of snow are complacent. But then another snow storm hits, and boom, something breaks and you have an avalanche, and everybody in the town at the bottom of the hill is dead.

In a way, this is like the US dollar. The dollar is very familiar, everybody uses it, everybody is in debt with it. Because of that, it sticks. Dollars rain down, and nothing bad happens. Then they do another round, and once again, dollars rain down, and nothing bad happens. But then at time point, the pressure overwhelms the system, and boom, the whole thing goes to hell.

Measuring the velocity of money is like measuring the velocity of snow. It doesn't tell you any useful information, till it does, at which time it is beyond too late. The important measure is not the velocity of money, but the misallocation of capital in the system. The total money supply, and the rate at which it increases is is far more useful and relevant to that measure than the velocity of money.