I am kind of shooting from the hip with this post, having not fully thought through potential causes, but...
In the last book that I read by Richard Koo, and really totally consistent with all the well-known Keynesians out there, there is a belief that a balance sheet recession prevents huge amounts of QE from causing inflation. And, according to most "experts", Europe is in the midst of a balance sheet recession. So, why then are inflation rates spiking up from Germany to Belgium to Spain? Add to that, bond rates for weaker issuers (and I am throwing French OATs in there) are starting to flash out relative to Bunds.
I'm suspecting that what everyone thinks they know is about to be thrown on its head.
