By Benjamin Picton, Senior Market Strategist At Rabobank

J.P. Morgan once famously remarked that "gold is money, everything else is credit." That dictum was apparently forgotten during the 1980s & 1990s as gold's share of central bank reserves steadily declined and gold prices – for most of that period – did the same.

That period was the most recent era of high financialization, where Hollywood movies like Wall Street, Trading Places, Barbarians at the Gate and even Pretty Woman glorified the swashbuckling lifestyle of financiers. It was also the era of the leveraged buyout, the rise of the MBA, the retail day-trader speculating in the dotcom boom and the germination of the idea (in the Anglosphere, at least) that you too can get rich through landlording – effectively transforming housing from a consumption good to a financial asset. This was also the era of the imperialism of the US Treasury Bond.

With the benefit of hindsight, it is reasonably clear from the data that this period ended with the popping of the dotcom bubble, but the final eulogy was not read until the financial crisis of 2008 when the excesses of high financialization were truly laid bare. This imbued the arguments of non-market economies like China that American system was decadent and sclerotic – and that the their system was superior – with apparent credibility. Along with military misadventure in the Middle East this constituted a heavy blow for the soft power and prestige of the United States.