Fearing Inflation

"Paul Krugman says we have nothing to fear but the fear of inflation. But isn't the fear of inflation, er, worth fearing?" - Conor Clarke.

Conor also produces a helpful chart of bond yields to argue that the recent spike in long-term interest rates is more a function of abnormal lows than sudden highs. We'll see, I guess. Here's the chart:

That sudden collapse at the very far right - and the sharp reversal - is the center of the debate. Is this a return to normality or a harbinger of worse to come?