So the supply will mimic the fiat money and grow over time.
Yes, but... ^^
Again this is an economic principle that must be understood. Like fiat, the money supply will grow over time, however this does not mean that the currency is inflationary. It is actually possible to have have a growing money supply that is also deflationary. Peercoin's "net effect" is deflationary even thought he money supply will increase. Increasing the money supply is useful and necessary. It is essentially to the effect of adding an unlimited number of 00000 after the decimal place. Take for instance Bitcoin's 8 decimal place limit. The Peercoin's system is the equivalent of allowing an unlimited number of decimals. (See above post too)
It may be "technically" inflationary, but it's different than fiat
in a way, because the inflation or new money goes out to the people saving it
in a distributed and decentralized way...inflation is especially bad when it is distributed in a "centralized" way, but this is "decentralized"...so if the value of your coins goes down because of PoS inflation, it doesn't actually matter because you just got more coins from it too
Instead of the "government printing money, and the people suffer" it's more like the network is "printing money for the people, and nobody suffers"