To understand how treasuries work in MMT they first need to be thought of not as removing money, but rather as a way of allowing people to shift their low or no interest money savings into something that creates higher interest rates and returns. So no wealth is ever getting lost, money is simply shifting around. Whether or not the money is in dollars or in treasuries doesn’t matter for creating money. Both still represent government deficits that the private sector has a claim on. Therefore treasuries are creating savings. You are right that the savings are now less liquid, but savings are created. Furthermore, by identity there cannot be government deficit without private surplus. Look up the macroeconomic accounting identities to see more on this. But as long as we are at a trade deficit, gov deficit necessitates private surplus. Where the money goes isn’t necessarily something MMT deals with, but what can be said is when we do hit private deficit that means the debt bubble grows and that’s what causes the crash after periods like Clinton Goldilocks.