by Simon Bond

 

Rethinking "everything".

The new skills required in this technologically innovated deflationary global economic environment are becoming clearer by the day. Now that people have generally accepted that there is an accelerating rate of change (and  subsequent rates of return) upon us, not just here, but everywhere, minds and attitudes are now being recalibrated to the issues of problem solving.

Everything is gradually being connected. People can travel the globe, live and work anywhere where there is an internet connection, depending on their profession of course, but this number seems to be growing exponentially. So how do you set a minimum wage in a global economy where scale is achievable almost anywhere.

The new world of work is so different from anything we have seen. The Coworking movement is seeing significant growth the world over and as workers gravitate to places where the cost of living is lower and the standard of living is more attractive we will see continued downward pressure on wages and income needs. The cost of doing business in Australia remains one of the highest of any westernised economy.

"Coworking is a style of work that involves a shared working environment, often an office, and independent activity. Unlike in a typical office environment, those coworking are usually not employed by the same organization".

Above is a chart of the most recent U.S. Inflation data from State Street Global, over the past weeks this rate of decline has been accelerating and I hope that the folks at The Federal Reserve are taking note. The Bond market in the U.S. is also telling us something. Economic news this week from Europe has also been troubling for authorities and I see no near term end to this.

Current U.S. 30-year yields fell as much as three basis points, or 0.03 per centage point, to 3.21 per cent before trading at 3.24 per cent at 12:32 p.m. New York time, according to Bloomberg Bond Trader data. They touched 3.18 per cent on Aug. 8, the lowest since June 2013.

Ten-year yields fell to 2.39 per cent before trading at 2.42 per cent. Five-year note yields dropped one basis point to 1.57 per cent.

The 10-year note yield will end 2014 at 2.92 per cent, according to the median forecast of economists surveyed by Bloomberg from Aug. 8-13. The previous estimate was three per cent.