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Wednesday, 11 March 2009

The BBC keep pushing the government line on inflation

The BBC's piece on the Bank of England's starting of the process of quantative easing sticks rigidly to the government line that the problem is deflation. The BBC analysis is that:
"Such an approach is unprecedented in the Bank's 315-year history but is now considered necessary as interest rates approach zero and deflation becomes a growing possibility.

Deflation - or falling prices - is bad for the economy as it encourages consumers to delay spending in the expectation that prices will soon be lower, potentially worsening an economic downturn. "
Not a word about the fears that many have about this process causing high, maybe even hyper, inflation. Do the BBC not consider this a possibility or have they instructions not to mention the prospect?

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