People here are probably too young to remember, but by the late 1980s Nikkei 225 index had risen by more than 900% over 15 years, outperforming Nasdaq and S&P and every other market by miles.

Japan’s invasion of Hollywood, with Sony acquiring Columbia Pictures. Mitsubishi bought the Rockefeller Center. Japanese investors were buying up US properties left and right. For your ordinary Americans, it had looked like Japan would own America by the end of the century.

Japan already overtook US in worldwide semiconductor sales in the mid-1980s, with rumors of Fairchild, IBM and even Intel itself being acquired by Japanese firms. An internal Intel memo predicting that “Silicon Valley might become a wasteland” as it laid off 30% of its workers.

Then… it all came crashing down by Christmas day of 1989. The extraordinary growth of Japanese economy had been fueled by cheap credit, leading to asset price bubble that eventually bursted. Japan never recovered from that.

The US would also go on the experience a similar fate: with the financial deregulation of the Clinton era (started during Reagan) pumping out cheap credit that fueled the 1990s growth, everyone thought they would get richer simply by endlessly borrowing from the banks and going all in into real estate. This ultimately precipitated in the subprime mortgage crisis of 2008, and the global financial crisis of 2009. In many ways the US still hasn’t recovered from that crash.