I agree but the reason the velocity has been slow is because it has been used to fill the black hole left by the housing bubble. It has in effect been extinguished.
The banks use the spread to limp toward solvency and the rest of us put up with a crappy economy while the central bank takes care of them. They have proven to be far too politically powerful to be allowed to be subject to the forces of capitalism that the rest of us face.
Eventually I believe we will have a large dose of inflation. And I agree that it will come from foreign currency being released into the market. The dollar as global currency reserve is on borrowed time. It allowed cheap energy but it also allowed the US to be stripped of its manufacturing base. The end of its regime will mean a reversing of this process but as of now there is no viable alternative. Eventually I think there will be several global currencies and the dollar will be one of them. But it is an extremely complicated process and there will be enough pain to go around and then some.
Hell it is happening around us as we speak and 90% of Americans still don't see it. A good many think reducing regulations or doing away with government unions will make us globally competitive, lol. This thing is so big that trimming around the edges won't even touch it. This is a total shakeup of the status quo. It has been going on for decades and isn't halfway done yet, not even close.
Will
