Like other solar companies, Suntech is struggling to cope with falling prices, soft demand and excess supply.

FORBES: Suntech: Investors Fret Over $541M In Debt Due 3/15

Over the past two years, some of the main drivers of Chinese inflation have been excess liquidity combined with strong domestic demand and supply shocks to food prices and commodity prices, according to Chang.

FORBES: China Tightens Liquidity Amid Stubborn Inflation

Deflation is dangerous, on the other hand, when it reflects a sharp slump in demand, excess capacity and a shrinking money supply as in the early 1930s.

ECONOMIST: Could it happen again?

This unfortunate policy cycle delays the rebalancing of world accounts that is needed to restore economic equilibrium, and it can freeze the kind of private investment that is needed to get the developed economies going and to boost supply in the emerging markets where there is currently an excess of demand.

FORBES: Markets: Risk Aversion But Not Risks Averted

Traders worry that Spain, Italy and other weak European countries might follow suit, flooding the market with excess supply just as demand for the metal is weakening.

NPR: Gold Plunges To Lowest In More Than 2 Years