As Peter Cohan wrote earlier today, Goldman Sachs (NYSE:GS) reported record revenue and profit this week. Quarterly profits rose a whopping 93% over last year. Quarterly revenues were $37.7 billion and profits were $9.5 billion. These are the biggest numbers ever reported by an investment bank. The New York Times ran a graphic about Goldman Sachs in the today's business section with the title, "Year of Magical Profit."

Partners and star employees at Goldman Sachs will receive millions in bonuses over the next few weeks. Much of that money will end up in the various luxury markets centered on New York City -- high end real estate, art, jewelry, wine, exotic cars. Bonuses from Goldman Sachs alone will help drive New York real estate higher, even as the rest of the country sees stagnant or falling prices.

There's an interesting question here about who profits in the economy and why. We are living in an age of finance. Credit is the driving force, much more so than equity or production. The Times reports that "credit derivatives continue to grow at a geometric pace, with $27 trillion outstanding." I can't even comprehend that kind of money, but it's obviously essential to the American and global economy.

From an investing standpoint, this data suggests that the financial sector is central to any investment strategy. As Peter Cohan suggested, Goldman Sachs seems like an important core holding. But there's a serious question about how long these kinds of profits can continue to gush and grow. Credit markets are notoriously unstable and tend toward bubbles and bloat. And in the bigger picture, it's worth wondering about the foundations of the global economy. Is it all driven by the hot air of credit? Could it come crashing down at any moment? Economic historians tell us that the financiers have seized control of the global economy in the past, and it usually hasn't ended well. The glorious financial economy of the late 19th century ended in World War I, and the credit-mad 1920s ended in the Great Depression. And as Mark Twain once said, history does not repeat itself -- but it sure does rhyme.