The big assumption: interest rates will not rise. This assumption is based on the assumption that the fed can control interest rates. But if asset prices rise,

The big assumption: interest rates will not rise. This assumption is based on the assumption that the fed can control interest rates. But if asset prices rise, and alternative currencies are considered to be less-risky than the dollar (e.g. yen or electronic currencies) then the return on US bonds will go up. When returns go up, interest payments go up and crowd out government expenditures.