How should the effects of central bank balance sheet expansion be analysed?

When central banks increase the size of their balance sheets, they buy bonds and pay by creating money. The only effect of this operation is that non-central bank economic agents hold more money and fewer bonds. It is important to understand that all the expected effects of central bank balance sheet expansion stem from economic agents’ reaction to a change in the structure of their wealth, with more money and fewer bonds: If economic agents try to restore the previous structure of their wealth, they will buy bonds and long-term interest rates will fall; If economic agents use the excess money they hold to buy goods and services, there will be inflation (in the prices of goods and services); If economic agents diversify their money holdings into other currencies, the exchange rate will depreciate; If economic agents use the excess money they hold to buy other financial (equities) or real estate assets, the prices of these assets will rise; If economic agents consider that bonds and money are highly substitutable (which may be the case if bond yields are very low and stable), then replacing bonds with money in economic agents’ balance sheets will have no effect. This is what risks happening if central banks resume quantitative easing today.