This is a very complicated question because it relies heavily on your understanding a lot of how the financial system already works.

Disclaimer: I'm not an economist, just an interested third-party.

There is no single book that will explain it, and it changes so any book will likely be quickly out of date by publish date.

The banking system is a fractional reserve system. That means each private bank from the smallest local bank to the top 5 must keep a fraction (percentage) of their managed assets in reserve as treasury bonds. The rest of the money can be loaned out.

The Fed itself is a private corporation, it consists of a Board of Directors (Washington DC), 12 Fed Branches, and the FOMC Committee.

The book, The Creature of Jekyll Island, has many useful references in coming to terms with how this came about albeit very critical, its references appear to be accurate at least in the newer versions.

The Fed, auctions off bonds each day, which to my understanding, the banks are forced to buy and hold for the reserve and other market operations.

Quantitative Easing is nothing more than money printing. Assets are swapped for bonds allowing banks to loan more money out (in the interest of preventing liquidity freezes), and there are REPO and Reverse-REPO operations that allow injecting money by loaning the assets (often loans and other securities), or flat out purchasing them. Like with student loans, they become backed by the government.

For the last decade or so, the assets transacted have primarily been toxic assets that may be valued above their actual value. There is little transparency, they've gone by many names Collateralized Debt Obligations being the most infamous. The banks keep the money, make more money by loaning more money out (with little regard for risk), and then sell it back to the FED.

In short, its counterfeiting and fraud if anyone else does it; but not when this is sanctioned by an arm of the FED.

Ray Dalio has good material on historical debt cycles. It appears that we are likely to be looking at something similar to Zimbabwe, (Weimar Germany was better) and that's coming up in the near future.

You have to get pretty deep into Economics coursework to correctly calculate and even economists often get this wrong because there is no accounting for fraud in the existing system. Junk in, Junk out.

Its worsened by the lack of credibility, and the fact that the measures for calculating important metrics such as CPI, Jobs Reports, Unemployment, etc, have been systematically changed so the metrics are under-reporting. This is not new, it has happened over the last 40 years like climate change; no one important paid attention. The metrics now follow more inaccurate methodology and that appears to be driven largely to reduce Cost of Living Adjustments (for Social Security), thereby reducing discretionary spending from people with fixed income.

Its known that those at the top of the system generally get the most benefit from the money created by the system than those at the bottom.

So the question I imagine you are actually wondering (because this is an XY question), is how this all works when you have to factor in the fact that people default on debts and there is bankruptcy protection.

Where does that debt go when it becomes un-collectable.

If its an individual they had to show collateral to get the loan in the first place, and they lose that collateral. Any excess (unsecured) amount is a liability to the lender. Anything not collected or paid that's written off comes at the expense of the lender.

If its a large bank, you have the frauds like the too-big-to-fail, or more appropriately, so big it will certainly fail. These get bailed out with public funds (which are printed) and may even be zombified (Freddie Mac) so they can work around legislation preventing the Fed from buying direct assets.

In other words, every single extra dollar printed devalues all other dollars in circulation which are held by everyone.

This is often seen in the form of inflation. The money you held is worth less tomorrow than it was today. Normally there is a target of 2% inflation per year which mimicked gold being mined, but as anyone is aware over the past 20 years we haven't hit that target, its been much higher, while wages largely haven't risen to match.

Because there is often a lag between when we find out about the printing, and the amounts, everyone holding US dollars and treasury bonds end up being bag holders.

This can continue for decades, until you reach a certain point and a currency crisis ensues. This historically has happened around the 300:1 paper to actual asset ratio, or leverage ratio.

Also, as a side note, many of the trend relationships we've seen historically have inverted, likely in large part due to undisclosed bad actors. For example, a few years ago China had a large amount of gold found to be gold plated copper after audits. The gold backed huge loans which then defaulted. The money that was paid out didn't disappear out of existence, and because it represented a systemic risk I believe (I'd have to double check on that) that they were bailed out.

Similar issues have occurred in the past with railroads where failing railroads were cannibalized by their banks with the intent of being bailed out.

As far as I'm aware none of the banks involved in the Penn Central bailout received much in terms of punishment for their bad behavior and did receive bailouts. They didn't have to disclose financials due to exemptions for regulated industries, and they were failing, the funding banks board members gained control of the Railroad board (same people), lent vast sums to pay out dividends, and then filed for bankruptcy and got bailed out.

The COMEX for many assets only deals in paper (called Warrants) unless you work with a broker that has a loadout policy, and the market for Silver has been artificially manipulated for decades (by JPM) up until the DOJ let them off the hook with a slap on the wrist. They moved to the UK and are doing it all over again but I digress. Paper to Physical in Gold/Silver are roughly 200-300:1 physical oz.

Fun fact, the COMEX is a private institution that has never been independently audited.

There's similar issues going on with synthetic stock market shares and dark pools that have gone unaddressed.

It should also be noted, that Quantitative Easing is only a small piece of the overall fiscal deficit and liabilities.

For private individuals to do these things, its called fraud and is a form of a Ponzi scheme. These systems could be made simple, but instead they favor complexity because the added complexity limits those who can benefit.