While bitcoin is deflationary over the long-term, is it appropriate to say there is inflation in the short-term?  That is, while new bitcoins are being generated until 2140, is this addition to the money supply causing a degree of inflation?  This is my friend's question.  I told him I believe that any level of inflation is just slightly slowing the price increase of bitcoin and that, even during this period, the net effect is still that bitcoin is deflationary.  I don't have the economics background to answer him better.  That's why I'm hoping for someone with more econ background to help me out here.

Actually, this leads me to ask a second question: what is the general defense to economists' general argument against deflation as it relates to bitcoin.  How are people incentivized to spend, rather than hoard bitcoins?  Thanks!