Do Low Interest Rates Breed Deflation ??

In my opinion, yes if we look at real assets.  In analyzing price indexes for various types of commodities, one index we use to give us a snapshot, is an index made up of copper, lumber, and gold, real stuff not affected by weather or politics.

2008 High    2009 Low    2012 QE3    Year Ago    2015 Low      Current

181.72             104.35           200.75          158.70         137.85          144.41

So in spite of all the QE3 hype, this index is down 28 % from the start of QE3 and down 21 % from the 2008 high.

With Japan, Europe, and now China jumping on the low interest rate bandwagon the race to the bottom on real asset prices will continue.  At some point these datapoints will rollover into paper assets.