I've been thinking about the reconciliation. Gresham's law and the phenomenon of moving towards harder money are consistent with each other.
Bad money driving out the good = value transferring out from those saving in bad money to those saving in good money.
Naturally, the velocity of the bad money is going to be high: people are trying to get rid of it as quickly as they can. This velocity increases until it gets to a critical points and the bad money is discarded, suddenly and entirely.