where is the inflation?

if the money supply increases, doesn't that necessarily mean that people have more money and hence the prices of things will go up? inflation. since the start of the iraq war in 2003 and the billions per month that i assume the fed is printing out of thin air, i would expect an inflation crisis.

Federal Reverse Money Supply M2 = CURRENCY, TRAVELER'S CHKS, DEMAND DEPOSITS , SAVINGS Accounts, SMALL TIME DEPOSITS <$100,000, seasonally adjusted, (cost of war on terror that year) 2003 Jan - $1226 billion ($70 on war) 2004 Jan - $1305 billion ($65 on war) 2005 Jan - $1365 billion ($110 on war ) 2006 Jan - $1378 billion ($115 on war) Current Inflation

2003 Jan - 2.60% 2004 Jan - 1.93% 2005 Jan - 2.97% 2006 Jan - 3.99 % 2007 Jan - 2.08%

ok so it is climbing somewhat, but the war does not seem to be the driving factor.

i expected a holy apocalypse of inflation given all the news that the value of the dollar against other currencies is dropping. maybe this data is not useful in a foreign current exchange view of the dollar.