Mistakes about inflation

We are in the mess that we are are in today because of 2 connected reasons: Gordon Brown's binge spending, binge taxing and binge borrowing over the last 10 years; and the failure to control inflation which has made him able to carry on like that--a policy which he wants to continue in order to get us out of the situation in which it has landed us!
But, you say, inflation has been controlled! It has been kept to a little more than 2% until very recently.

Oh, no it hasn't! (It's that time of year.) What has been kept down to that level is Mr Brown's preferred CPI (a cost-of-living index), the one favoured by the EU, instead of the old RPI, which has been consistently higher. And what both of them record is merely a basket of typical household purchases and other outgoings. They are both signs of inflation, not inflation itself, though even leading commentators (such as Roger Bootle in the Telegraph), constantly refer to them as 'inflation' as if the thermometer were the temperature.

Inflation, let me remind you, is an increase in the supply of money greater than an increase in the supply of goods and services. Gordon Brown's policy of spend-a-lot, tax-a-lot and borrow even more, had inflated the money supply by much more than the 2-4% shown in the cost-of-living indices. The increases in asset prices as have been shown in the FT index and in house prices showed that the money supply had greatly increased beyond that of goods and services. Otherwise increases in some ranges of prices would have been matched by decreases in others. Yes, the prices of computers and other electronics and 'white goods' have fallen, but those of everything else have risen.