I can still get a 30 year mortgage for 6.5% - a very low rate by historical standards - which means that the future expectation for inflation is very low. The bond market isn't always right and global events that could change this however, I'll believe the markets take on this long before I believe someone FR who wants me to buy into conspiracy theories about the feds cooking the CPI and the PPI reports.
I don't know what you mean by conspiracy theories -- it's all documented -- in the public domain. I take it you don't read much in the way of economics.
If inflation were really as high as you imply
I'm not implying anything; I'm stating it! The producer contracts in my area went up by 7%. That is not based on some inference or hedonic adjustment. It is an absolute amount. What's more the processors don't pay one more penny than they have to to keep the farmers in business.
If inflation were really as high as you imply, no one would be accepting these rates for their money.
As Benanke stated last night, even the Federal Reserve doesn't understand why long-term rates stay relatively low. I wouldn't assume you have the correct interpretation.