This chart at the St. Louis Fed has a lot of people worried about future inflation, because it represents idle money that, when lent out, could eventually flood the world with 10 - 12 trillion new dollars. But my father says that it has already been lent out in the form of short-term US Treasury notes.
So if it is cash that has not entered the monetary system, we could see some massive inflation when it is allowed to be lent out in our 10% fractional reserve system.
If it is in treasuries, then it's already out, and the chart doesn't pose such a threat.
Does anyone know if excess reserves are or can be held in US Treasuries?