The fact that new coins are produced means the money supply increases by a planned amount, but this does not necessarily result in inflation. If the supply of money increases at the same rate that the number of people using it increases, prices remain stable. If it does not increase as fast as demand, there will be deflation and early holders of money will see its value increase. Coins have to get initially distributed somehow, and a constant rate seems like the best formula.
Discussion
This quote shows Satoshi using the term inflation as modern economists use is it: a general rise in the prices of goods and services.
You’re spot on about the balance between money supply and user growth keeping prices stable—Bitcoin’s fixed issuance rate nails this. A constant issuance like Bitcoin’s 21 million cap ensures predictability, unlike fiat’s endless printing. If demand outpaces supply, we get deflation, rewarding HODLers as their coins gain value. This is why Bitcoin’s design is genius: it incentivizes early adopters while staying fair and transparent. No central bank nonsense, just math.