> I think our current method of measuring inflation against the CPI is nonsense,

It's not nonsense for policies that are directly concerned with consumer prices, which most that the CPI (or, more precisely, any of the CPIs, of which there are several) is used for do. We have lots of other inflation measures (, industry specific PPIs, for instance) for other purposes.

> Measuring inflation (or whatever you want to call the difference between an asset's nominal value and it's intrinsic value) is still useful

That's not what inflation is supposed to measure, because that's a nonsense thing to try to measure, because there is no such thing as intrinsic value.

> but the current method of pegging everything against the bag-of-goods in the CPI seems like an overly simplistic model.

How? Consumer prices are final prices. Everything else is instrumental to producing final goods and services.

> The intrinsic dollar value of an asset is its value relative to how many dollars there are

No it's not, and even if it was, that wouldn't make M1 a sensible measure. Why not the actual number of actual dollars there are: monetary base. Or something that better captures the number of effective dollars, M2.