You tell me:



Source: Federal Reserve, author's calculations.

Of course, this chart tells you nothing as to whether bonds are overvalued. I happen to think they are, but this chart won't tell you.

What it shows, though, is important: Investors are plowing into bonds with abandon. Keep in mind, this chart only depicts wholly owned Treasuries. Not corporate bonds. Not bond funds. Not bond exchange-traded funds. Just Treasuries. (That, by the way, is likely why the current level isn't much higher than those reached in the mid-'90s. We now have many different bond-investment vehicles to choose from that didn't exist 15 years ago. And owning whole Treasuries is probably the most cumbersome.)

There's only one way to accurately describe what this chart shows: flight to safety. Which is understandable; people are scared. But what does it mean for asset prices? I can't realistically see how the stampede into bonds will end anyway but badly.

Examples of the bubble really get nasty when you look at the corporate debt world. Microsoft (Nasdaq: MSFT) just issued three-year debt at a record-low 0.875%. IBM (NYSE: IBM) isn't too far behind, issuing three-year notes at 1%. Johnson & Johnson (NYSE: JNJ) issued 10-year notes at under 3%. With companies taking maximum advantage of these low rates, I'd much rather own their stocks than low-yielding 10-year Treasuries. If a historical example with a happy ending exists of investors running headlong into an asset class on the basis of fear and panic, I'd love to hear of it. 

What do you think? Are Treasury bonds a bubble right now? Take the poll below and let us know.

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Fool contributor Morgan Housel owns shares of Microsoft and Johnson & Johnson. Microsoft is a Motley Fool Inside Value selection. Johnson & Johnson is a Motley Fool Income Investor recommendation. Motley Fool Options has recommended diagonal call positions on Johnson & Johnson and Microsoft. The Fool owns shares of IBM, Johnson & Johnson, and Microsoft. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.