High levels of global slack are the primary cause of deflationary pressures. Weak industrial production in the EU and UK is lowering demand for industrial inputs; Japan’s depressed capacity utilization rate is contributing to the phenomena. Low US and EU labor utilization levels are depressing consumer demand. Finally, in response to China’s insatiable raw materials appetite, Australian business overbuilt their basic materials sector, flooding the market with raw materials at literally the worst time possible. The combined impact of t