If that is true, the flood of foreign money into the country could be diluting the Fed's effort to prevent inflation. That would imply that the Fed needs to raise rates more than many investors are expecting.
It is true that the flood of foreign money exists, and is likely to be having some effect on keeping our long-term interest rates down. But the utter weakness of long-term rates still seems odd.
I think it's because our prospects of importing even more deflation in the future keeps getting greater. The dollar should keep strengthening and that's going to make imported goods even cheaper.
It is not odd when you realize that the willingness of the Fed to increase rates indicates that it will not allow inflation to get out of control. Thus, investors are not demanding a large "inflation premium" to lend money and rates fall. This paradox is nothing new and can be observed frequently when rates are increased.
BTW increasing the rates is a sure way to attract MORE money to the country countrary to the foolish last sentence you quoted not less. And since foreign money does not come into this country as foreign currency it must purchase dollars which are already part of the Money Supply it is not a factor in inflation under a Floating Exchange Rate regime. The writer of this article gets a D in economics.