Expand the quantity of base money, and it turns out that velocity falls in nearly direct proportion.

FORBES: Has The Fed Lost Control?

When the quantity of base money grew rapidly (it has tripled since mid-2008), its growth in dollars was almost matched by bank reserves.

FORBES: Is Fed Policy Twisted Or Merely Sterile?

All else equal, such a rapid increase in the quantity of base money would soon after result in a rapid and general increase in prices throughout the economy.

FORBES: Is Fed Policy Twisted Or Merely Sterile?

But when analysts saw the quantity of base money double during the last quarter of 2008, they were justifiably concerned about the increased likelihood of future price inflation.

FORBES: Is Fed Policy Twisted Or Merely Sterile?