A fierce debate now rages among economists, investors, pundits and the puppetmasters of fiscal policy: What’s next, inflation or deflation?

Has the most massive money-printing spree in history successfully stimulated the global economy and put it back on an upward course with rising inflation? Or are we still in a global downturn, temporarily masked by the stimulus, with prices, wages and employment still falling?

A comforting 30% gain in the major stock market indexes since the March lows has given renewed confidence to the “green shoots” trumpeters who dominate the airwaves and the press.

But grayer and wiser heads in the investing community—like Dave Rosenberg, John Mauldin, Nouriel Roubini, Gary Shilling, Peter Schiff, and Dave Cohen—have a more bearish view. The financial sector must now deleverage, they argue, which means liquidating assets, repaying debt, saving instead of borrowing, and contracting in general. In their view, the process will take years, not months, and what we have seen since March is a classic bear market rally.

We are starting a new monthly series today. Once a month, a selection of peer reviewed articles from several Energy Journals will be posted on the Oil Drum by Rembrandt and EROI Guy. The journals from which we select articles include Ecological Economics, Biomass and Bioenergy, The Oil & Gas Journal, The Energy Journal, Resource and Energy Economics and Energy Policy, to name just a few. Links are provided to articles but some may require fees for access.

This is a guest post by Chris Cook. Chris is Former Director of the International Petroleum Exchange, and is now a Strategic Market Consultant and commentator. The post was written prior to the G20 meeting which started April 2. In this post, Chris proposes that international trade be denominated not in dollars, but energy.

In the approach to the G20 meeting we saw two distinct threads of global policy emerging: one by the global debtor nations, led by the US, and another by global creditor nations, led by China.

When I plotted this chart, I was surprised to see that US primary energy production has held steady since 1981 at just over 1.5 billion tonnes oil equivalent per year. Declining oil has been compensated by rising coal and natural gas production. However, despite this abundant wealth of energy, the US has chosen to live beyond its means.