Is hyperinflation coming to America?

There's a really good article by Robert Higgs online at the Independent Institute where he discusses excess reserves that American banks currently are keeping and the impact this could have on the money supply once they start lending again. He notes:

At matters now stand, by far the greater threat is rapid inflation, notwithstanding the ongoing recession. When the banks begin to feel more comfortable with expanding the volume of their conventional loans and investments, they will have more than $550 billion on hand to employ for that purpose. The multiplied effect of such a vast amount of lending, as newly created deposits make their way through the fractional-reserve banking system, portends a gargantuan increase in the money stock and hence a correspondingly enormous jump in the general price level. As the public responds to the acceleration of inflation by reducing its demand for cash balances, the increased velocity of monetary circulation will contribute to even more rapid price inflation.

I agree that this looks very harrowing. However, there are two points I don't understand. I've posted into the comment section and I hope someone answers. First, I know that Japanese banks also carried excess reserves in the late 1990's to early 2000s, but this didn't create serious inflation (at least not apparent inflation. The yen was certainly weakened, perhaps more than it should have been.) Second, I wonder what true excess reserves are if one considers all the bad assets these banks might be holding. I don't for a second think that a central bank can be any substitute for the free market, but I do think the distortions created by a central bank are often so convoluted it's quite difficult to work them out. It goes without saying I'm not an economist. :-|