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Global Recession

December 2001 - Community Enterprise

The World economy is in big trouble. For the first time, all major economies are in, or are sliding into recession. Global growth is expected to hit just 2.6% which is technically a recession.

Across the world, hundreds of thousands are being laid off, and millions will follow investments are drying up. Share prices will be unstable. Families will struggle under the burden of record personal debt.

Global recession

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People need income security. Millions of people will need the security or safety net of a second income, and most will need to be flexible part-time, and with low investment. What they will need is a direct sales/networking opportunity the very catalyst the industry needs in order to drive it onwards and potentially, double or triple growth predictions.

Franchising had it! The history of franchising in most developed countries began between the 1950s and 1970s. There was a lot of hype and focus on growth. However, there was a 99% failure rate and both the media and goverment attacked the idea. This was the classic story.

In the 1980s better business models were created which enabled the industry to boom and become more profitable. In the UK, there was 600% growth in just 6 years. This growth was mirrored everywhere. One of the reasons for this sudden, substantial growth were the economic difficulties that many countries were suffering in the 1990s.

This provided a new pool of people in planes such as the UK and Australia who wanted/needed a franchise opportunity.

This is EXACTLY THE SAME SITUATION TODAY!

We've had our growth wave and the industry is established in every country of the world. There is big hype, a huge failure sale, and new business models are emerging.

ENTER THE FINANCIAL CRISIS to drive people into our industry!

Your job is to learn about the crisis, you need to appreciate the trouble the world economy is in at the moment. People with problems need to have a paradigm shift.

The last time the U.S.A. the worlds key economic engine, went into recession in the early 1990s it was balanced by strong growth in Japan, Germany and the emerging East Asian countries.

Let's look at the situation of today, in order of economic muscle:

USA: Unemployment has jumped to 4.9% and corporate profits are collapsing. Personal debt has his hit record levels, and free falling stock prices are wiping out economic confidence, thus spending is guaranteed to drop, pushing the economy into short-term recession.

JAPAN: This is an economic basket-case. Over the last 10 years since then $1 trillion has been spent on wasted projects. These projects designed to stimulate growth, litter the country, Japan is now left with empty new airports and motorways that go nowhere. The sad reality is that Japan's rapidly ageing population needs the wasted $1 trillion to pay for massive pension requirements over the next 50 years. Unemployment is at a record 5% which covers real unemployment of 10%. The de-regulation required is not politically acceptable, so further decline can be expected.

GERMANY: They are falling into recession. The government is sick of supporting east Germany and has crippling social security bills.

EU: Here growth rates are dropping. There is record government debt and record personal debt. Governments are not allowed to increase their debt, so must increase taxes to pay for increasing social costs of aging populations and higher unemployment. The new single currency (introduced next month) will create a short-term economic upheaval to clear differing economic cycles. Europe needs extra growth, yet other regions of the world have falling interest rates which push down the value of their currency and make the EU's exports seem more expensive.

EMERGING EUROPE: If the EU succeeds, the emerging European countries do not just catch a cold, they get influenza! Their populations are living in an increasingly crumbling structure and toxic environment, and the EU will not have the growth to support them as they have done in the past.

CHINA: The recent boom here, has been based on export growth. The extremely low cost of manufacturing in this country means this growth should continue as global companies must find lowest possible manufacturing prices

EAST ASIA: Many of the countries here, from Korea to Indonesia, did not restructure the economy after their financial crisis of 1997-1998. The only thing to save them this time was the continuing USA boom. Now it seems as if their lack o faction will come back to haunt them. Scores of insolvent banks, and many other old problems from those countries. They do not have an edge, and they have many poor people who will work for very little, but with no global growth, this region should suffer.

CENTRAL AND SOUTH AMERICA: With the USA in recession, the rest of America will suffer.

Summary:

The world is facing huge financial difficulties, with the last twelve months seeing 75% of the drop, yet I do not expect a global meltdown. There are still mountails of money sitting in pension/investment funds ready to be invested next year. The point is that there is a dramatic rise in financial insecurity. Personal debt is at a record level and banks need to squeeze people in order to pay for wasted investments of companies.

Never in the last 25 years has the time been better to offer an additional source of income to people. I believe that this will be the catalyst direct sales need to create a new global wave. In 10 years from now, we will look at 2002-2003 as the most fertile time for recruiting. If you cannot build an organisation over the next 2 years, there must be something seriously wrong with you!

Of course you need to be in company with a 2nd wave programme and have good leadership. Here's my advice: read lots of newspapers and watch TV. Find lots of examples of what is happening to the economy in your country and use those examples to confirm your right place., right time story.

Never, I repeat, never, is there a better time to be in this business. You are in one of the few industries in the world that is driven by economic downturns. Thank your lucky stars.

 
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 Gavin Scott
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Promoter: Kleeneze UK Ltd, Express House, Clayton Business Park, Accrington, BB5 5JY

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