"As noted, the flight to safety is taking on epic proportions."

Maybe Napier has been reading Izabella Kaminska on Alphaville:

Treasuries bubble danger Posted by Izabella Kaminska on Dec 10 10:25.

As noted, the flight to safety is taking on epic proportions. With that in mind our thoughts are going to what may happen next, or specifically, the implications of a Treasuries bubble. Here’s one view from Monument Securities (our emphasis):

Though a Treasuries bubble might appear unproblematic, however, its bursting could turn out to be more dangerous than the collapse of any other kind of bubble. If confidence eventually returned to other markets, investors would shun the low yields on Treasuries. The Fed would then face the choice of monetising most or all of the Treasuries market, as funds fled to higher-return investments, or else of allowing Treasuries yields to race higher. Because foreign holdings represent a significant proportion of the stock of Treasuries outstanding, a collapse in Treasuries prices might soon be reflected in a collapse of the US dollar, with the accompanying threat of hyper-inflation in the USA and depression elsewhere. At that point, many investors might wish they still enjoyed the comparative calm of the ‘credit crunch’.

Hmmmm, not good."

I've already accepted the fact that we might be in a Treasuries Bubble. In a way, it's implied in my Human Agency approach to these problems. But it's not preordained. However, that would seem to be what everyone who thinks like me is worrying about, and so the problem of inflation going forward is staring us right in the face, not, as some people felt about the housing bubble, being ignored.

I'm assuming that one of those people is Ben Bernanke, but time will tell.