Arraya’s chart of the liquidity trap is a good illustration of monetary velocity (or demand for cash balances if you are utilizing the Austrian framework). There’s no question that it is relevant, and that velocity is low/demand for cash balances is high — this is a key factor in helping to keep consumer price levels from rising.

Velocity is also a topic I covered in my article so I won’t rehash it here… but just to clarify so that things don’t become further confused, the discussion up til now has been about the amount of money in the economy. The amount of money is an important concept, and the velocity at which it is spent is also important — but they are two different topics. (Arraya I am not saying that you are conflating the topics, I just want to clarify the distinction in the attempts to keep the waters from getting even more muddied).