Yesterday's much-anticipated S&P downgrade of U.S. treasury bonds is obviously a historic event.

It seems the world has spent the years since 2008 stumbling from one debt crisis to another. In fact, if we count the Third World debt crisis, which did after all affect most human beings on the planet, the world has been in a continual series of debt crises since the '70s. The difference is that until very recently, the U.S. was the ultimate arbiter of who owed what to whom, and on what terms. 2008 marked the moment when that began to change. Yesterday's downgrade of T-bonds that had long been treated as literally as good as gold by the world's central bankers marks the first full, public admission that this is no longer the case.

Now, S&P might seem a peculiar choice as ultimate credit court, considering their decidedly less-than-stellar performance in the mortgage crisis—giving AAA ratings to a series of toxic derivatives that ultimately crashed the world economy, causing major financial institutions to have to be bailed out by the very government whose bonds they've just downgraded. But what's the alternative? The IMF? It has troubles of its own, to put it mildly.

But a broader historical view reveals this is precisely the problem. Since 1971, when the U.S. abandoned the gold standard, and the world has been moving to a system of virtual credit money, we have been entering a new period of history. But it's not entirely unprecedented.

In fact, contrary to popular belief, credit has been the predominant form of money in world history. In ancient Mesopotamia, elaborate credit systems predated coinage by thousands of years. Periods in which people assume that money really "is" gold and silver, let alone use cash in most everyday transactions, are more the exception than the rule. Ancient empires, for instance, used coins mainly to pay soldiers, and when those empires dissolved in the early Middle Ages, society didn't really "revert to barter," as its often believed, but returned to elaborate credit systems—denominated in Roman (and then Carolingian) currency that no longer actually physically existed.