Although it seems the fed creates money out of thin air, it at least has to balance the ledger- this is called buying US bonds (which has always been the mechanism to control the money supply- popular media thinks it is the discount rate). If Trump discounts (renegotiates) the bonds, then the ledger is balanced with a loss by the fed and the money remains in the economy. So you laugh at me, but you made my point.
And when the assets are redeemed for an amount of electrons less than their carrying value, what balances the other side of the ledger?
Reserves (equity).
And when a bank’s reserve amounts gets too low, how many new loans can it make? That is how the money supply will get reduced, sir.