So where did it go? "Low velocity of money" is not a place money flows
You know how "burning bitshares is like distributing the shares proportionally to everyone else"?
It it a specific instance of the equation of exchange (http://en.wikipedia.org/wiki/Equation_of_exchange
) M*V = P*Q. When you remove money from circulation permanently, it is like reducing either Monetary base (M) or velocity of money (V) permanently, resulting in lower prices (P) and thus deflation which is a benefit for coin/share holders.
What we have seen with QE is that while monetary base M has increased (due to printing of fresh money), velocity of money V has proportionally decreased (because banks park that fresh money directly with the central bank), causing P to remain constant. Once V increases back to its natural level (when the now bank-owned QE money is actually used in the economy), P will shoot up exactly by the proportion M was originally increased.
edit: judging by this chart, the dollar could be currently overvalued by more than 10%. I'm not sure if there's a plausible scenario where this all comes at once, though.