Throughout history, people have dealt with both inflation and the recession.  It’s an on-going process or a spiral of wills.

The rate of currency will fall and prices will go up; then a recession will follow and as a last ditch effort, government steps in to lower interest rates and once again build consumer confidence.  One of the most recent forms of government intervention occurred just this year, in February of 2009; the Parliament passed the Banking Act of 2009.

Basically, this act involves saving those banks that are failing, securing and protecting depositors, and ultimately setting out to financially secure the country.  You see, as banks fail, there are fewer loans available for the public and businesses, no money in the economy means less items purchased, less items made; and ultimately the fall of currency.

The Banking Act of 2009 in all regards is basically to try and set in motion a certain string of events.  First, the act will give government control over certain failing banks; these banks will have access to funds, but will be watched over carefully by committees to ensure they are doing business in a profitable way.  Second, it will protect those that are already in business with these banks; depositors will be protected from losing their money.  Lastly, it sets in place tools that will ensure this never happens again.

With the Banking Act of 2009; it is the hopes of the government that the public will benefit, as well.