I would disagree - we do, in fact, face real inflationary pressures. Our currency's value goes up and down on the market. The market going up means nothing if the value of the dollar drops. The market is priced globally, only represented in dollars. The two are in a nice lock step. Once you remove the dollar's variance, you'll see the true market and inflationary picture.
Dealing with the fed gov issue - there would be inflation, but the unemployment level is so high and pay dropped so low, that inflationary pressures are kept at bay by instant drop in demand should prices rise. There has been an effective drop in real wages for decades, and at this point the bulk of the population can no longer accept increased prices. So your simplistic model does not account for enough variables to draw any meaningful conclusions.