The bond market is certainly getting flooded right now, Lilo, there's no doubt about that. Stay away from bonds: municipal bonds, long term treasuries, etc., stay away from bonds all together. And ignore the dollars recent rally; instead count on foreign currencies which are paying more right now--although a lot of investors see a bright 2011 for the dollar's value.
Of course, investment firms like Moodys wants to sell you all of this stuff, so they're real concerned right now. But it's the frivolous underwriting exhibited by companies such as Moodys that has killed this market.
FYI The Euro's plans on becoming the world's reserve currency are officially in smithereens. Euro is WAY down to the dollar today.