Why has the meaning of inflation shifted from the original money supply to the Consumer Price Index? Ludwig von Mises has the answer:
To avoid being blamed for the nefarious consequences of inflation, the government and its henchmen resort to a semantic trick. They try to change the meaning of the terms. They call "inflation" the inevitable consequence of inflation, namely, the rise in prices. They are anxious to relegate into oblivion the fact that this rise is produced by an increase in the amount of money and money substitutes. They never mention this increase. They put the responsibility for the rising cost of living on business. This is a classical case of the thief crying "catch the thief." The government, which produced the inflation by multiplying the supply of money, incriminates the manufacturers and merchants and glories in the role of being a champion of low prices.
Ludwig von Mises. Economic Freedom and Interventionism.
Frank Shostak, an excellent monetary economist, has a similar answer:
Historically, inflation originated when a king would force his citizens to give him all their gold coins under the pretext that a new gold coin was going to replace the old one. In the process the king would falsify the content of the gold coins by mixing it with some other metal and return to the citizens diluted gold coins.
Because of the dilution of the gold coins, the ruler could now mint a greater number of coins for his own use. (He could now divert real resources to himself.) What was now passing as a pure gold coin was in fact a diluted gold coin.
The expansion in the diluted coins that masquerade as pure gold coins is what inflation is all about. As a result of the increase in the amount of coins, prices in terms of coins now go up (more coins are being exchanged for a given amount of goods). What we have here is inflation, i.e., an expansion of coins. As a result of inflation, the ruler can engage in an exchange of nothing for something. Also note that the increase in prices in terms of coins results from the coin inflation.
Frank Shostak: Commodity Prices and Inflation: What's the Connection?
Now you know that there are the two distinct faces of inflation. The monetary inflation (MZM or other monetary aggregates) is the real thing. The CPI index may be also useful for certain purposes, but very often is used (or abused) to make the public think inflation is lower than it really is.