Looks to me that pre 2008 financial crisis, the UK had around £500Bn of gilts - perhaps paying (costing) 5% average/year (interest paid). The BoE then printed £400Bn and bought up most of those gilts, where the interest they received on the gilts they bought is returned back to the Treasury. Comparable to having written that debt off and where the Treasury sold £1Tn worth of new gilts, stretched out over longer and paying half the interest as the replacement, so still costs much the same as before to service. What that did however was flatten the yield curve, right out to long dated 50 years or more.
The US did similar, but have recently started a corporate bond purchase, where up to $8Tn of Corporate Bonds could be purchased (they've set a upper limit of 70% of any one issue maximum being bought). Capacity to print $8T, buy up 70% of the US corporate bond market and the state also collects the interest payments from those bonds.
Pension funds have to buy Gilts, mandatory, so as the prices rise so they have to buy more, which pushes prices higher/yields down, so they have to buy even more ... For others however, when bonds are up, so they might reduce bonds to buy stock in order to realign to target asset allocation weightings. The US Fed buying Corporate bonds is pushing stock prices up.
The EU is even more crazy. Massive bad German bets (debts) were moved over to the ECB post financial crisis, and the ECB printed/purchased 2 Trillion of assets to offset that, buying Treasury, corporate, junk and stocks. The rest of the EU in effect bailed out Germany (LOL! The others wont ever see that being reciprocated).
Conceptually when you can legally counterfeit, that could be abused to the extreme. So why not just print and buy up all bonds, stocks, houses ...etc. Well there are limits, beyond which others will accept the hit and dump, such that the currency would collapse and hyper-inflation follow. The Euro is perhaps at the greatest risk of the currency/bonds being dumped (only takes a sniff and the out-flight can be very hard/fast).
Each note added to the existing set of notes devalues all other notes. The counterfeiter gets the benefit of spending that new note, at the expense of all other notes being devalued a little (a form of micro-taxation). A form of total wealth taxation, on top of all other taxes already being paid. But where Central Banks can tweak things up/down as they see fit, given that raising/lowering interest rates is no longer viable when interest rates are at/near zero already.
If others don't buy more gilts/treasury bonds as they're created so that would export the countries problems onto others. A attempted devaluation of the currency when you hold billions of a countries bonds would otherwise have holders lose out. So those others have to buy more, likely after also printing more of their own money to do so. Such that all currencies are seeing declines, along with higher prices, lower yields and expanded holdings. But at the risk that at any point one could say enough is enough, start dumping and see others rapidly follow that lead.
My guess is the next round will involve protectionism. Where foreign holders are ejected out of holding a countries assets/bonds. Which then forces that countries problems being exported onto others, leading to those others opting to dump that countries bonds/currency. Again IMO the EU is at the greatest risk of that occurring.
How to play in that arena? A third each in £ (invested in gilts/bonds), primary reserve currency (US$ invested in US stocks) and gold (global currency/commodity). Draw a conservative SWR from that, 2% - enough to cover basic living expenses. Top slice additional income out of real gains as/when apparent (yearly reviews). There is a element of additional reward/benefit from taking a SWR, this for example indicates a CAGR after 2% SWR of 8.65% compared to 9.52% TWRR if no SWR is drawn https://tinyurl.com/y94vwe7v
i.e. 2% SWR + 8.65% CAGR sums to > 9.52% (where no SWR was drawn).
A ten year gilt ladder is starting to run low (starting to earn < 2%), maturing 10 year gilts would roll into replacement 10 year gilts earning hardly any more than if rolled into a 1 year. Makes more sense to not roll into 10 year but instead roll into 1 year. So on the 'bond' front its pretty much just hold shorter term gilts. Even if real yields are negative it doesn't really matter as they're there to buy up stuff as opportunities present. Cash for instance has had the capacity to buy 30% more stock than at the start of year (30% increase in the stock purchase power of cash over a few months). If you rebalance yearly at/around the fiscal year end (5th April) then at the last rebalance you'd have been reducing gold and cash to buy more stock/shares.
In GS's case, investing for (grand)children (accumulating), it can still be appropriate to take SWR and top slice real gains into cash holdings. But then looking to deploy that cash elsewhere and/or at another time. In some years the real gains after SWR will be large, high rewards achieved over a short period of time. Taking some/all of that off the table can coincide with having reduced at above average valuation levels (reduce high). And then feed that back into the market in a more cost averaged manner (add low) or where better value seems apparent. GS is way way better of a bond vigilante than I. Mostly I've been reducing bonds in ISA space to buy stock comparable to the amount of stock sold outside of ISA space, and using that outside of ISA cash (stock sale proceeds) to buy into high street bonds (5 year ladder) for the higher interest being paid. I really should get more into rolling down the yield curve and other similar strategies to what GS does. Frankly though, I'm rather lazy on that front. 'Cash' pacing inflation versus losing -2% relative to inflation when a third weighted (0.7%/year relative to the total portfolio) is borderline 'being worth the time/effort'. Asset allocation/management is the more productive, for instance UK stocks down -30% versus cash near break even, gold up +16%, US stocks down -6% year (in £'s, -10% in US$ terms) to recent type comparisons.