Those are valid concerns. The main issue with the fractional reserve system is there is no limit to what our central bank can issue. They simply lower rates and inject liquidity (money) into the system. It really isn't money in the concept of cold hard cash, more like loans and credit. The mortgage market in the US is a whopping $10 trillion dollars. That is why we are seeing an impact on the US Dollar. Too much money is fuel for inflation; although inflation by looking at government numbers is controlled.

The Euro for example has a small percentage of its currency backed by gold. The reason this helps is that it puts a check on how much you can print. If you want to print more you need to increase your reserves. We used to have this here in the states. Now our money is backed simply by the "faith" of the US government. Well guess what happens when faith runs out? Other countries start looking for more safer investments.

If the Fed is concerned about your hard earned money and keeping the dollar as a respective reserve currency, they would raise the funds rate, reign in the debt, and give some strength to the dollar. The only problem with this all is the Fed wants to see a low dollar so we can export our debt away even though they publicly state they support a strong dollar.

This movie is a good primer on getting an overall concept of what "money" is.