You can have a base currency with inflating money supply. Gold has mostly had a 1-2% increase in supply due to mining (tho during the exploration of the new world there was dramatic increases in European Gold and Silver supplies).

The main issues arise when you have a money supply that can be expanded or contracted arbitrarily and at zero cost by a centralized entity. This leads to an absolutely corrupt situation, as insiders benefit immensely from control over the money supply.

The arbitrary contraction of the money supply is an often overlooked issue. Through this power the insiders can time asset bubble tops and reap massive gains from cherry picking assets post contraction.