Even during the Great Depression, governments in the U.S. and abroad paid more than now to borrow for a decade, Englander says. At the end of the crisis-roiled 2008, the so-called Group of Three's rate was still above 2 percent.

More broadly, bonds in the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index had an effective yield of 1.28 percent as of yesterday, the all-time low, based on data starting in 1996.

The former Federal Reserve Bank of New York economist sees two possible reasons for the free money.

First, it could be secular stagnation, a term popularized by former U.S. Treasury Secretary Lawrence Summers. He contends that rich nations are suffering a persistent lack of demand and should take advantage of the low bond yields to boost spending.

Even with the U.S. accelerating, the world economy is not “out of the woods,” Summers told a weekend conference of economists in Boston.

Englander's second theory is that while central bankers have been aggressive in cutting interest rates and pursuing quantitative easing, investors may be concluding that policy needs to be even more innovative if it is to gain traction.

It is “striking that this is not happening during the panic phase of a crisis, but after the panic is over and we have had significant recoveries in asset prices globally,” Englander wrote.

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