Not quite. PPC is deflationary because although there is no cap on the supply, the supply is controlled by Moore's law which basically caps the supply by lowing the inflation rate so low that it's even lower than Litecoin. Essentially the inflation rate determines scarcity not just the total supply. The total supply is at 19 million which is equal to Litecoin but the price isn't equal to Litecoin yet. That means there is a lot of room for profit if you buy at these prices and it reaches $3.
Because PPC will be mined with ASICs, GPU miners will have to switch to Litecoin. Basically PPC's market cap and difficulty determine the price. Difficulty determines the scarcity while the market cap shows the demand. If it's scarce and in high demand the price rises.
What happens when ASIC miners drive difficulty up so high and quit, making the next retarget never come? Remember Namecoin before it was merge mined?
Why would difficulty be any factor for price? Scarcity is apparently a non-issue currently so that is irrelevant.