Author seems to have a very poor understanding of BoP and any arguments as to effect current account deficits had on rates are simply erroneous.

Foreigners do not fund and can not fiscal deficits unless the sovereign issues foreign currency bonds. They fund current account deficits. That the size of the current account deficit is exactly equal to the net foreign funding is axiomatic. Those are not new dollars buying treasuries (actually a large amount of FX reserves was invested in super-senior AAA tranches of ABS prior to the credit crisis) and they simply can not affect interest rates in any way shape or form.

An incremental dollar in China reserves means either one less dollar in RoW reserves, one less dollar is American savings or one more dollar in American liabilities. They are zero-sum. The extra dollar used to buy an asset by China (through SAFE or Huijin) was obtained by selling an asset elsewhere. There is no net effect to interest rates from this operation.

China was able to amass a large trade surplus with the US by allowing PBoC to control the currency and due to certain factors that allowed PBoC to buy USDs from exporters without the necessity of sterilization (by "printing" RMB), which, in combination, allowed China to avoid a level of revaluation that would shrink their current account surplus. China did this because current account surpluses mean you are effectively exporting unemployment.

Your professor was right and you are wrong. A US current account deficit is simply a an exchange of foreign goods and services for the promise of future American goods and services. All a massive negative cumulative current account means is a huge amount of pent-up demand for American goods and services. No more, no less.

It has nothing to do with quantitative easing in any way shape or form and to imply that it does is irresponsible and a disservice to your readers