We are instead in an era of "financial repression" in which the Fed and the US Treasury and the G-8's other central banks are deliberately keeping interest rates low in order to manage the carrying costs of the massive public debts racked up by the their governments.
In addition, the tightening of financial regulations increasingly directs large pools of investment cash into the purchase of government debt and away from equities and commodities and corporate debt. Finally, the lack of tax cuts has diminished economic growth and implies greater austerity in the years to come.
In such an environment, money velocity is down due to an increased preference for the holding of cash and cash equivalents. Thus much of the new money created by the Fed does not go into the purchase of new goods and services so as to spur inflation.
Most notably, oil -- the central commodity of the modern world -- has declined in price due to the development of oil shale fracking in the US, a relatively weak world economy, and tensions between Saudi Arabia and Iran. Yet such factors are facilitated by the US financial regime that is suppressing inflation despite the Fed's massive dollar creation in recent years.
The recent declines in the gold price further signal that the world is recognizing that catastrophic inflation is not in the offing. That is too bad for gold bugs -- but good for the rest of us.
Been to the grocery store lately? Inflation is alive and well, and obvious to all those who are honest about it.