The World's Center of Gravity Is Moving: Why the Euro, the Singapore Dollar, and the Yen Are More Likely to Weaken Over the Next 10–20 Years

2025-12-18 · Muchun

English translation of the Chinese original (AI-assisted). Read the original in Chinese.

When people discuss exchange rates, they tend to start from interest rates, inflation, and chart patterns. But what truly decides a currency's long-term fate has never been short-cycle data. It is the position, structure, and role a country occupies in its era.

In a recent U.S. National Security Strategy, the United States unusually named Europe's problems directly, openly acknowledged a strategic retrenchment, and gave up the role of "global caretaker." This is not just a diplomatic document. It is a manual describing how the world's power structure is changing.

If we stretch the horizon to 10–20 years, three things are happening in the world:

The global center of power is moving toward Asia and the Eurasian continent
The United States is shifting from "comprehensive control" to "selective intervention"
Most developed economies are entering a period of simultaneous demographic, fiscal, and strategic decline

Against this backdrop, the euro, the Singapore dollar, and the yen happen to stand on the same downward structural line.

I. The Euro: A Single Currency for a Europe That Is No Longer United

The euro's core problem has existed since the day it was born:

There is a single currency, but no single fiscal policy, no single security arrangement, and no single political will.

When the world is in a period of peaceful expansion, this flaw can be covered up; once the world enters a period of turmoil, it is amplified without limit.

Europe is now facing all of the following at the same time:

The United States explicitly reducing its security commitment
A prolonged Russia–Ukraine conflict
Declining leadership from France and Germany
Political and economic division between Eastern and Western Europe
An aging population and the hollowing-out of industry

What does this mean?

It means the euro area is more likely to maintain stability in the future through monetary easing, hidden inflation, and fiscal transfers, rather than solving its problems through real growth.

A political union that keeps fragmenting will find it hard to support a strong currency over the long term.

The euro is not at risk of a short-term collapse. It is a currency that bleeds slowly over the long term.

II. The Singapore Dollar: A "Confidence Currency" After the Era's Tailwinds Fade

The Singapore dollar has been remarkably strong for more than a decade, but not because of the size of its economy or the depth of its industry. It is the sum of three "era premiums":

A regional financial hub within the U.S.-led system
A safe harbor for Asia's politically defensive capital
A passive beneficiary of Hong Kong's period of turmoil

All three share one premise:

The United States must stay deeply engaged in Asia, and China's financial system must remain unstable.

Now both premises are changing:

The United States is pulling its strategic focus back, and its presence in Asia is declining
The financial systems of mainland China and Hong Kong are gradually recovering
Core ASEAN countries (Indonesia, Vietnam, Malaysia) are rising in the real economy
Singapore itself faces clear ceilings in economic scale, population, and supply chains

At its core, the Singapore dollar is a confidence currency, not a production currency. When its "irreplaceability" disappears, the currency naturally has to be repriced.

What is more likely is not a crash, but a moderate, sustained depreciation channel lasting 10–15 years.

III. The Yen: Locked In by Demographics, Public Finances, and Geopolitics

If the euro's problem is "institutional defect" and the Singapore dollar's is "the ebbing of the era's tailwinds," the yen's problem is simpler, and harsher:

The demographic structure is irreversible, the fiscal structure is beyond rescue, and geopolitical security is fading.

Japan is facing, all at once:

The world's most severe aging and lowest birth rates
Government debt of 260% of GDP
The continued relocation of manufacturing overseas
A monetary system that has long been unable to raise interest rates normally
The gradual withdrawal of U.S. strategic protection

Once expectations of external security decline, capital will not wait for Japan to "adjust slowly."

The yen's long-term depreciation is not a policy choice. It is the only way to keep the system from collapsing.

Structurally, the yen's role in the coming decades looks more like:

A debt buffer
A shock absorber for demographic decline
A release valve for geopolitical risk

So the yen entering a deeper depreciation zone does not go against the logic.

IV. The Shared Fate of the Three Currencies: Outside the World's Center of Gravity

The euro, the Singapore dollar, and the yen seem unrelated, but they share one thing:

None of them sits in the central region of global power and growth for the next 20 years.

The long-term main threads of the future world are:

Structural competition between China and the United States
Asia's internal circulation and the reshaping of Eurasian land power
The rising position of the Middle East and resource-rich countries
The migration of population and industry toward emerging regions

Europe, Japan, and Singapore all happen to stand on the outer edge of the world's structure.

This does not mean these regions will "collapse." It means their currencies are better seen as assets whose value is slowly being repriced, rather than long-term anchored stores of value.

Conclusion: This Is a Trend Judgment, Not a Short-Term Forecast

One point must be stressed at the end:

This is not a forecast for tomorrow, next month, or next year. It is a long-term probability judgment based on geopolitics, demographics, public finances, and the structure of the era.

Over the next 10–20 years:

Euro: structural weakening
Singapore dollar: the era premium recedes
Yen: the long-term depreciation path continues

The world is changing tracks. A currency is only ever the shadow of a nation's destiny.

Seeing the structure clearly often matters more than watching the price.