> I, a foreign entity, have sold something to an american and now have 10 dollars and zero treasuries.

Or you sold something to a non-American entity in a dollar-based market, eg. oil. The dollars do come from America to begin with, but once they get "out there" they work as a medium of exchange for whoever wants to use them for that purpose.

Which is why the US historically bombed any country that sold oil for other currencies, but now china is negotiating the petroyuan and it's working.