Text 14. Monetary reform

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Monetary reform – денежная реформа

Propose - предлагать

Current – текущий, современный

Gold standard – золотой стандарт

social credit – общественный долг

privately-owned – находящийся в частном владении

existence - существование

lend – одалживать, давать взаймы

simultaneous obligation – одновременное обязательство

multiply – увеличивать, умножать

loan – заем, ссуда

depositors' cash – деньги вкладчика

exploiting - эксплуатация

Monetary Reform describes any movement or theory that proposes a different system of supplying money and financing the economy than the current system.

Most monetary reformers generally advocate at least one of the following:

* A return to the gold standard (or silver standard or bimetallism*

The issuance of "debt-free" money directly from the Treasury (rather than the sourcing of government spending via interest-bearing bonds from the central bank

* The issuance of social credit (interest free loans) from a government-controlled and owned central bank.

* The enforcement of full reserve banking for the privately-owned banking system.

All these camps oppose the continued existence of a government-sponsored central bank to control and monitor and support the fractional-reserve-based private banking system.

Fractional Reserve Banking is the system whereby a bank is legally entitled to lend money in circumstances where it has the simultaneous obligation to return this money to depositors/savers immediately "at call". Through this accelerated scheme of money creation, it is able to multiply the amount of loans/deposits/capital the banking system has by a factor determined by law. The resultant loan is created only because of the bank's legal right to lend out depositors' cash - even though the bank has the legal obligation to return this money to depositors immediately they ask for it. Banks exploiting the practice of fractional reserve banking can only remain viable if depositors do not all ask for their money back at the same time. This system of banking is called "fractional reserve" because the bank is legally required to keep only a "fraction" of cash in "reserve" for immediate payment to all its clients/depositors.

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