A body on steroids looks incredible. More mass, more power, faster recovery — real, visible, measurable gains.

Then the cycle ends. And the same body that looked unstoppable can collapse faster than it ever grew, because much of that strength was borrowed from a chemical it can no longer produce on its own.

Economies run on a steroid too. It's called credit.

While it's flowing, everything looks strong — rising GDP, climbing asset prices, confident spending. The question almost no one asks during the boom is the only one that matters: how much of this is real strength, and how much is the dose?

Credit is the steroid of an economy.

Like any steroid, it produces genuine, visible results while it's in the system. Borrowed money gets spent, and that spending shows up as growth. It lifts GDP, inflates asset prices, and makes balance sheets look healthier than the underlying engine could manage on its own.

But those gains are borrowed from the future, and they depend on continued doses. Slow the credit and growth slows. Withdraw it and the economy doesn't just plateau — it goes into withdrawal.

This isn't an argument that credit is evil. Steroids have real medical uses. It's an argument about honesty — knowing the difference between strength you built and strength you're renting.

Start with the size of the dose.

By the end of 2024, total global debt sat around $251 trillion — about 235% of world GDP, according to the IMF. Private debt alone runs near 143% of GDP; government debt near 93%.

For scale: on the eve of the 2008 financial crisis, global debt was closer to 195% of GDP. The world didn't become 40 points more productive in the years since. It became 40 points more leveraged.

Here's how the steroid works in the bloodstream. Consumer spending is roughly two-thirds of U.S. GDP, and a large share of it is financed — credit cards, auto loans, mortgages, student debt. Money borrowed and spent today is counted as growth today. The GDP headline rises. It just never mentions that some of the strength was advanced on credit. We broke that mechanic down in Credit & The American Economy.

The same dynamic inflates asset prices. Cheap, abundant credit doesn't just let people spend more — it lets them bid more. More borrowing capacity chasing the same houses, the same stocks, the same businesses pushes prices up. The asset didn't become more productive. The financing became easier. That's the gap between price and value we examined in Artificial Wealth: When Prices Rise but Value Doesn't.

Nowhere does this distortion hide better than in a valuation.

Say you're acquiring a business and you pull its last five years of financials. Revenue up. Profit up. A clean, rising line. On paper, a healthy, growing company worth a strong multiple.

But ask the harder question: why did it grow? Did the product get better? Did the systems improve? Were key hires made, new markets opened, real operating leverage built? Or did it grow simply because there was more money moving through the entire economy — and some of it filtered through this business on the way past?

Those two stories produce the identical five-year chart. They are not the same company.

The distinction matters because of when that chart was drawn. Between early 2020 and 2022, the U.S. money supply grew by roughly $6 trillion — close to 40% — according to the Federal Reserve's own M2 data. That tide lifted revenue at millions of businesses that did nothing differently. Their customers simply had more dollars to spend.

You can see the same distortion in the price level itself. Consumer prices rose roughly 20% between 2020 and 2024, by the government's own CPI. A business whose revenue climbed 20% across those years didn't necessarily grow at all in real terms — it roughly kept pace with the cost of everything else. The chart still points up and to the right.

So when you value that company on its recent history, you have to ask what you're actually pricing: durable strength the business built, or a temporary dose that flowed through it. Pay a multiple on the dose, and you're buying growth that doesn't repeat once the money stops expanding — and inheriting the comedown at full price.

This is where the metaphor stops being a metaphor. Researchers have measured it.

In a 140-year study across 14 advanced economies, economists Moritz Schularick and Alan Taylor found that credit growth is one of the most reliable predictors of financial crises — more reliable than most traditional indicators. Their summary is blunt: crises are credit booms gone bust.

And the dose matters. The more credit-intensive the boom, the deeper the recession that tends to follow. A bigger cycle doesn't just mean a bigger party. It means a worse comedown.

Housing is the clearest case. Follow-up work by the same researchers shows mortgage-credit booms and house-price bubbles are tightly linked to the crises that come after them. IMF research adds the numbers: when a credit boom coincides with a housing boom, the boom tends to run about 25% longer and 40% larger — and the bust that follows is longer and deeper. In one IMF sample, 21 of 23 “twin booms” in real estate and credit ended in a crisis or a severe slowdown.

The reason the comedown is so brutal is the same reason steroid withdrawal is: the system adapts to the dose.

When credit is freely available, asset prices, spending, and collateral values all settle at levels that only make sense if the credit keeps flowing. Tighten it — through higher rates, stricter lending, or a shock to confidence — and the process runs in reverse. Falling asset prices shrink collateral. Shrinking collateral chokes lending. Less lending means less spending, which pushes prices down further. The IMF finds that downturns combining a credit bust with a housing bust are far longer and deeper than ordinary recessions, precisely because of that spiral.

None of this lets you time the next bust. That isn't the point.

The point is what it means for you, sitting inside an economy that runs on a substance it doesn't control and can't quit. The relevant question isn't “when does the cycle turn.” It's “how much of my own financial life depends on the dose?”

Because most people are deeply exposed without realizing it. Their net worth rides on credit-inflated asset prices. Their access to capital depends entirely on a bank's willingness to lend — which tends to evaporate at exactly the moment they need it, when the cycle turns and lending tightens for everyone at once.

That dependence is the real risk. And it's why some of the most conservative capital in the system is held in a form that doesn't run on the credit cycle at all.

This is the quiet logic behind a properly structured whole life policy used as a private source of capital. The cash value grows on a contractual basis, independent of the credit cycle. You can borrow against it on your own terms — not a bank's — without an application or a credit check, in good times or bad. When everyone else's access to credit is being withdrawn, yours isn't, because you're borrowing against your own capital. It's the difference between depending on the steroid and being your own source of it. We covered the mechanics in Liquidity Without Liquidation — and it's no accident that the most regulated, most risk-averse institutions in the country, the banks themselves, hold billions of their own reserves in exactly this asset.

The economy will keep cycling on and off the steroid. It always has. The only part you control is whether your own strength is borrowed — or yours.

1. How much of your net worth is real strength, and how much is the dose? If your wealth has grown mostly because asset prices rose — not because you produced or owned more — some of that gain was advanced to you on the market's credit. It can be called back.

2. If credit tightened tomorrow and your bank stopped saying yes, where would your access to capital come from? If the honest answer is “nowhere I control,” you're depending on a steroid someone else administers.

3. In the next boom, when everything is going up, will you be able to tell the difference between value you built and leverage you rented? Almost no one can in the moment. That's exactly why the comedown catches them by surprise.

Wealth & Liberty is an educational platform. Nothing in this article constitutes financial, legal, or tax advice. Always consult a qualified professional before making financial decisions.

If you want one clear idea like this in your inbox each week, join the newsletter. And if this raised the question of how much of your own financial life depends on a credit cycle you don't control, the team at Producers Wealth helps business owners and high-income earners build capital they own outright.