What happens to the total dollar money supply is not relevant to your interest payment on the bank's ledger w.r.t. whether there is a transfer and compounding. Just because the money supply debasement is compounding faster than your interest is compounding, is irrelevant to whether the interest is compounding. Duh!
For each 1 STEEM created, 9 STEEM POWER are created and transferred to SP holders. This is a transfer of value from STEEM holders to SP holders, as a percentage of the market capitalization of the money supply.
So soon we'll all be steem millionaires, but steem will be approximately 1 millionth the value (and they'll adjust the units accordingly and employ rounding). Yay!
Maybe we can say the same about the dollar if we had 90% compounding interest investment valued in dollars and the Federal Reserve decides to hyperinflate the supply of dollars.
If there was no transfer of the percentage of the STEEM money supply from STEEM holders to SP holders, then there wouldn't be any compounding, because it would be a wash.
P.S. I don't think the Fed will do that. I am just making a math point.