The relationship between credit and capital is one of the most important drivers of an economy. Unfortunately this relationship is too often ignored by investors, bankers and policy makers – sometimes resulting in large unexpected losses. Like most relationships in an economy, credit and capital do not follow a linear and predictable path. Indeed economies can move from a stable and apparently linear state to one which displays chaotic characteristics due to shifting expectations. Accepting the nature of an economy’s unpredictability is critical if investors want to preserve the value of their capital through time. Moreover, acknowledging that credit innovation is a key driver of capital values has implications for policy makers to help boost flagging and failing economies.