Another version of Japan's lost thirty years is the decline of population - the decline of the working-age population. It can be seen (Figure 1) that Japan's working-age population peaked around 1995 and then gradually declined. This was divided into two steps. The economic decline from the 1990s to 2011 was mainly due to the decline in population. The per capita population was basically the same as that of the United States. Since 2012, Japan's per capita population (calculated by working population) has also begun to decline, and the gap with the United States has widened.

What happened in 2012? Abe came to power and promoted "Abenomics", which is essentially loose money, and the yen started to depreciate (Figure 3, the exchange rate at the end of 2011 was 77). Therefore, from the results, loose money did not save Japan from the previous population-driven economic slowdown, but instead lowered the wages of young people and reduced Japan's per capita output.

The logic is that young people have no assets, while the elderly have assets and can be converted into US dollars, so the elderly's assets are preserved, while the young are increasingly becoming social animals. The consumption of society depends on the young, because the elderly have no future and are unwilling to consume, and have no desire to consume - most of them are impotent 😂.

The US is the opposite. The currency has been rising from the bottom of 2011. In this model, young people who earn wages have a higher income distribution, which also supports the entire economy. Of course, the exchange rate and the economy are two sides of the same coin. In the final analysis, the US is a positive cycle of population => economy => strong currency => strong economy, while Japan is the opposite.

China's labor force peaked in 2016 and has been declining since then. But one advantage China has is that its urbanization rate is only 66%, compared to Japan's 78% in 1995. This 12% space should give China some impetus for development.

In addition, we should learn from Japan's lessons. We should not make a strong currency, but at least we should not make a weak currency like the Japanese yen. The essence of a weak currency is to exploit the young, support the elderly, and support the big capital.