A. The concern throughout the economy and its markets stems from the scissors effect of price deflation coupled with debt inflation. After rising with the economic recovery in 1983, commodity prices peaked out in the spring of this year. Since then, all broad commodity indices have been falling off sharply. Prices of all products from aluminum to zippers have been falling, primary products and end products together. Aluminum prices dropped 35 percent in three months; that industry's depression portends a setback more severe than a mere slowdown in the economy. Copper, my favorite indicator these fifty years, plunged from 80 cents to 60 cents. Lumber prices are hitting important new lows. Gold has dropped. Oil is off and continuing to weaken. On the end products side, IBM has broken its mainframe computer prices by 18 percent and absorbed another cut as deep in the form of concessions to dealers. Bonneville cut industrial power rates by 18 percent. Newsprint is the only firm price I know. Q. But the general price indices are still moving up. That's inflation, not deflation. Consumers see prices of cars, furniture, housing rising. A. I beg your pardon. Not just key commodity prices are falling. Prices of manufactured goods that reflect real activity are falling, too. Just hang on here, I'm not talking about consumer perceptions, but about the take-home pay to the vendor. Here I see three forms of subsidynone reflected in the consumer price indices-that amount to price-cutting. We saw a price cut this week of a very important end product IBM mainframes-and a 22 percent cut in the IBM desktop computer. The second price cut takes the form of credit charges; the auto industry has relied on single-digit rates for consumer paper to move more cars than the televised Olympics could. The third is in slow payment of bills. The whole economy is on slow pay. At today's interest rates, slow pay is a calculated form of price cutting and subsidy to buyers. That means that the vendors and distributors of major products like the auto distributors are caught in the squeeze between price deflation and debt inflation at high interest rates. The slowdown in the statistical economy has been pep-