The euro, currently flat on the day at around $1.3785, continues to defy the gravitational pull of soaring Italian bond yields.

Despite heavy ECB buying of distressed government debt, to the tune of EUR9.52 billion ($13.12 billion), Italian yields rose to a new euro-era high of 6.62% Monday. Yet the dichotomy between foreign-exchange and bond markets has not been lost on analysts, who think bond investors might actually be ahead of the curve.

In a research note last week, David Gilmore at FX Analytics referred to surging Italian and Spanish bond yields as "nothing short of a horror show" that requires the ECB to push the political class off the stage and seize the reins of leadership themselves.

As part of a "break the glass" strategy, Gilmore recommends the ECB do the unthinkable: print euros with reckless abandon in order to monetize the 17-nation currency bloc's debt load and convince the G20 to simultaneously intervene to curb the currency's downside.

But the analyst acknowledges the chances of avowed inflation-fighters doing something so out of character are virtually nil: The ECB "it is trapped in a dogma of price stability and monetizing eurozone debt is the equivalent of Weimar economics. You might as well have Ron Paul in charge of the ECB," he wrote.