Investors are convinced that inflation will remain subdued, even as central banks and governments make unprecedented stimulus commonplace. They are assuming the same thing will happen now as happened after 2009, when easy money failed to push up consumer prices.

But politics has changed significantly in the past decade, and, especially in Europe, governments have found a new way to create money without central-bank help. A new inflationary era might be on the way, and if it is, the markets have got it completely wrong.

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