this means that you are even nuttier if you buy the fixed bonds because the yields are below inflation expectations.... OUCH <<
I suppose if you are an institution/pension fund/or some entity that is mandated to buy bonds, what are your choices? At least with TIPs you have some hope of collecting some inflation premium, even if the government waters down the index.
That is why the TIP bubble keeps expanding. A deflationary episode is the only thing that will spike TIP's interest rate. Like the 2008 experience--even then it was rather brief.