The Central Bank of China is holding over $3 trillion in dollar denominated reserves. This is not on all on deposit with the Fed.

"Other than some small amount of cash, all US dollars exist only within the Federal Reserve system and are balanced with Treasury bonds. Other non-US entities can hold Fed accounts, but those dollars never leave the system and the Fed is the single clearing bank of all "net" dollar denominated monetary assets."

If I am a bond holder I don't have to get the Fed's permission to sell it or for the cash I receive to be deposited into a Fed bank. You familiar with offshore accounts held by billionaires and millionaires. Give me a break. When you talk about small amounts of cash I am assuming you mean billions of dollars.

TEK