Governments from the U.S. to Italy are boosting sales ofinflation-linked bonds, wagering consumer prices will remain incheck even after central banks inundated the world with cheapcash.

Thirty-five nations issued $1 trillion of the securities in thepast three years, the most on record, according to data compiled byBloomberg. The amount of government debt in developed countriestied to consumer prices is now equal to 7.9 percent of thefixed-rate sovereign bond market, the most since 2008, index datacompiled by Bank of America Merrill Lynch show.

While cost-of-living increases in the industrialized world havenever been smaller during an expansion, demand for the notes showsinvestors aren't ready to declare that inflation is dead yet aftercentral banks from the U.S. to Japan printed record amounts ofmoney to kick-start their economies. In emerging markets, a currency rout roiling nations from South Africa to Turkeyis already igniting inflation and threatening to add billions ofdollars to government debt costs.