A few weeks ago, it looked as though the end of the world had begun.

We are talking, of course, about the world in which credit, stocks, and central bank reputations only go up.

But after a big fright in August, investors recovered their relaxed madness. They concluded that there was nothing to worry about.

They may be right. You never know. But our guess is that the end of the world has already begun… and they just can't face it.

Disappearing Growth

Since the end of World War II, credit has been expanding in the U.S.

At first, it was a healthy expansion. Young, middle-class families took out mortgages and ran up bills on "charge cards," such as Diners Club and American Express.

Then, in the late 1950s, came the first credit cards. This was accompanied by large increases in consumer credit.