The market has inflated, but premier league teams - including Arsenal - are all significantly richer too.
The thing is, if Wenger and the board know we can't afford the top players (and it's kind of their job to know, right?), then we should be out getting the players we CAN afford who might improve the team. Leicester, West Ham, Southampton, Spurs, etc. have all managed to do that pretty well recently.
What's the point of spending entire transfer windows messing about with Suarez's and Higuains and then coming out and saying we couldn't afford them anyway? And that's the reason we haven't bought players for any of the important gaps in our squad? It's just ineptitude by Wenger and whoever else - if anyone - is dealing with transfers at the club.