They certainly are in Australia where the average rate of return on mining companies has fallen to a miserable nominal 2 per cent. Friends in the industry assure me this is world-wide and that other commodity producers are also suffering a severe price squeeze. If this is so, then the news is indeed grim. Figures from the US indicate that this process has already started with falling profits, output and rising layoffs in manufacturing, even as consumer spending continues to rise and the demand for labor in consumer related industries increases. But it is always the commodity producers who are the first to feel the chill of hard economic times.
Deflation is a monetary phenomenon and is caused by an absolute fall in the quantity of money.
The secular trend in commodity prices has nothing to do with deflation and is entirely due to an increase the supply of commodities. The Austrian school makes clear the distinction between a money induced change in purchasing power and a goods induced exchange.