How large are the largest central bank balance sheets?
Here's the Federal Reserve:
$7.15 trillion dollars
Source: https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
Here's the European Central Bank (no chart because of copyright):
Source: https://tradingeconomics.com/euro-area/central-bank-balance-sheet
€6.78 trillion euros or $8.07 trillion dollars
Here's the Bank of Japan balance sheet:
689993.10 billion yen or $6.69 trillion dollars
Source: https://tradingeconomics.com/japan/central-bank-balance-sheet
Here's the balance sheet of the People's Bank of China:
374727.69 hundred million yuan or $5.62 trillion dollars
Source: https://tradingeconomics.com/china/central-bank-balance-sheet
These are some staggering numbers. If you look at the graphs, they have all followed essentially similar trajectories after the financial crisis of 2008 as the Fed's graph has.
In the US, the Fed balance sheet to GDP was about 21 trillion to 7.15 trillion ~ 35% at the end of of Q3 2020. In the eurozone, the corresponding figure was about 64%.
Unwinding the balance sheets is hardly an option
Asset prices cannot help but go up because the central banks have little choice but to keep expanding their balance sheets.
Unwinding the balance sheet is not an option for the ECB. Particularly the southern European countries are not about to be able to fix their balance of payments problems any time soon even if Covid-19 were not a factor.
Despite the ECB balance of payment to GDP ratio being double that of the Fed's corresponding figure, consumer price inflation is very low in the eurozone. The Consumer Price Index has been pretty much flat in the last year.
Source: https://tradingeconomics.com/euro-area/consumer-price-index-cpi
I haven't personally done any math but my wife who does most of the shopping in our family often tells me she was surprised how her money went such a long way when doing her daily shopping. Power bills have gone up in recent years but that's because investments in the power grid have increased drastically in recent years.
Conclusion
It seems that fears of consumer price inflation from all the liquidity printing by central banks have been overblown. The money seems to stay in the financial system. A lot of it is in the excess reserves of commercial banks held by central banks. There simply aren't lenders willing to take the loans those reserves would make it possible for the commercial banks to issue. At the same time, central banks are on a buying spree that does not seem to be slowing down. It can't.
What that means is that big money will have to latch onto whatever it can to keep up with their yield targets. The share of pensioners of the total population will be growing at least for the next couple of decades. At some point there could be political pressure to allow pension funds to increase the allocation of funds to risk on assets such as Bitcoin in order to help them meet their yield targets.