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Secrets of the Temple: How the Federal Reserve Runs the Country

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One might think of William Greider's "Secrets of the Temple: How the Federal Reserve Runs the Country" as "Central Banking for Poets." If you've ever scratched your head in wonder when reading how Alan Greenspan and the Fed have "lowered interest rates" or are "easing monetary policy," this book will be extremely enlightening and well worth the time it will take you to plow through all 700 plus pages. If (like me) you majored in economics, you'll be surprised how much better Greider is in explaining arcane economic theory than your college professors (and you'll probably learn -- or re-learn -- quite a bit in the process).

The focal point of the book is the celebrated and controversial tenure of Federal Reserve Chairman Paul Volker (1979-1987), but the mechanics of central banking so clearly and concisely explained are just as much applicable today as in 1980 - or 1950 for that matter.

Greider divides the book into three more-or-less equal thirds. The first covers the inflationary surge of the 1970s, Carter's tenuous decision to appoint Volker, and Volker's radical move of abandoning the control of interest rates in favor of controlling the nation's money supply. (In other words, a shift from the Keynesian orthodoxy dominant in the post-War period in favor of a monetarist approach more in line with the theories of the iconoclastic economist Milton Friedman.) The second, and most informative third provides an historical overview of central banking and its development in the United States. For those solely interested in a better understanding of central banking and the US Federal Reserve in particular, this book will be worth your while even if you only read this middle section. The final third deals with Volker's punishing monetary policy during the early 1980s, as he attempted to destroy lingering anticipation of inflation and the incredibly simulative effects of the Reagan era federal deficits and tax cuts.

Greider is highly critical of Volker's performance as Fed chairman. In short, he argues that far from being the independent and benevolent Shepard of the economy it often claims to be, the Fed, in practice, is beholden to its most powerful constituency: the major money-center financial institutions (i.e. Citibank, Bank of America, etc.). Traditional central bankers view combating inflation as their primary professional objective, which tends to favor creditors at the expense of debtors. Grieder suggests that in waging war on inflation the Fed in effect was waging war on the millions of ordinary Americans struggling to make end meets and keep their heads above water.

Whether you agree with his conclusions or not, Greider's "Secrets of the Temple" is exhaustively researched, expertly written, and extremely enlightening.

While this book dismisses in one paragraph the idea that the Federal Reserve System was born of a conspiracy, it than goes on for over 700 pages to describe in fascinating detail the operation of, what must surely be the most sinister conspiracy ever hoisted upon mankind, the Federal Reserve System. The author is not a conspiracy theory kook or a John Birch society member, but rather an ex Editor of the Washington Post. The book is endorsed by Ted Kennedy, The Washington Post, and the NY Times, all noted for their liberal bent. It is not a politically motivated book but rather a shocking expose of the organization of banks that controls our economy and the worlds. Instead of "and that government of the people, by the people and for the people", the Federal Reserve system has made it "government of the banks, by the banks, and for the banks shall not perish from the earth". It is clear from reading this book that our economy and the world's economy is controlled by a handful of very powerful bankers. Our President and Congress have abdicated all responsibility via the Federal Reserve act of 1914. As Meyer Rothschild, Europe's premier Central Banker, said, "Give me control of the issue and value of money and I care not who makes the laws". Our government has no say whatsoever in the direction our economy is taking or for that matter how much of our money (printed by the Fed) is loaned to foreign countries. The banks have complete freedom to loan whatever amounts they choose to whichever countries they choose. If the interest on the loans cannot be repaid, they simply have the Fed print more money to loan enough to pay the interest. This book makes it clear that our entire financial system is built on a house of cards for the exclusive benefit of the banks that control it. They benefit in boom times and when there's depression and they are solely responsible for both. If you're concerned about your economic survival, your own personal freedom and our country, you should read this book. It wil enlighten you and also frighten you.

I'm not going to recap the book contents; others, who have read the book more recently, can do a better job of that. I will tell you, instead, about its long term impact.

It's been probably fourteen years since I read _Secrets_of_the_Temple_ and it still haunts me as one of the most important, most influential books I've read in my 46 years of life.

The common beliefs that the Fed is near infallible, that it always knows what it is doing when it takes action, and that 80 years since the last Depression is proof that the Central Bank will always pull us through are more mistaken than most people would believe. Reading the history of Central Banking will open your eyes considerably, I think. Oh, yes, and this book is actually a pleasure to read -- it's that smoothly written.

Greider presents a lively overview of the Federal Reserve System, illustrating its role in the global economy, and the global interests it serves. Greider presents a fascinating history of the Fed and banking system from the Populist uprising of the late 19th century to the global finance system we live in now. The book shows the truly immense power weilded by the Fed. EVERY AMERICAN SHOULD READ THIS BOOK!

Although I read this book years ago I'm reviewing it today because I perceive it is very important that more of us understand money, our monetary system and the intersection between money and power. Recent financial meltdowns in Thailand, Russia and Argentina provide a roadmap of the risks we face and which could be coming home to roost.

William Greider's book is a good introduction to the system. It's well written, informative and easy, entertaining reading.

Early in the book he asks a question about why it is that during the period leading up to the end of the 19th Century "Money and Monetary Systems" were hot topics in American political life, but today they are really off the radar screen?

That's a good question. Do you know the answer? I'd bet the answer is you, like most Americans probably don't. This book will give you the understanding you owe it to yourself to get. After all, it's your money.

Here is a quick overview of how I figured out the monetary system to the point of being confident that my understanding is reasonably correct and being able to explain the basic scam in about 45 minutes.

First I became convinced that if I am ever going to understand how the world works I should probably figure out an answer to the question "what is money?" Surprisingly, a search on Amazon.com did not return very many books on the topic. Like any good college educated liberal I chose the one book which garnered praise from all my favorite trusted sources such as the New York Times and the Washington Post. I didn't see how I could possibly go wrong spending $12.92 for the 800 page book "Secrets from the Temple: How the Federal Reserve Runs the Country", which The Nation said, "May be the most important political book of the decade."

Unfortunately, after reading William Greider's 10 year, day by day account of Federal Reserve Chairman Paul Volker's back and forth decisions on raising and lowering interest rates, I still did not have the foggiest clue as to what money is or how it is created. I'm sure most people would have given up at this point but I was not ready to throw in the towel. For some reason I was not convinced by the book's conclusion that it was critically important to maintain the money mystery because "Taboos uncoded lost their power to persuade...The mystery was necessary, therefore, to sustain social faith. Knowledge was disturbing. Not knowing the secrets was reassuring."

I needed another book, however the only ones that the New York Times seemed to recommend were all described as condensed versions of "Secrets of the Temple." I had no choice but to bite the bullet and for the first time in my life order a book which was not recommended by the New York Times. I ordered "The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin. At least Willie Nelson seemed to like it. Actually, I wasn't quite sure if Willie Nelson was wholeheartedly endorsing the book in his review which simply read, "Scary. It's the story of the world banking system. Enough said."

I was quite pleased that Jekyll Island contained a pretty good description of the money creation process. However, the book contained a lot more than that. All I can say is that I often see my life as divided into two main periods; before reading Jekyll Island and after reading Jekyll Island. I finally knew what Willie Nelson meant by "scary."

Now that I was starting to really get somewhere in figuring out how money is created, I needed to find more information to clear up some of the details. My wife even got involved in the search for truly academic and scholarly information. I will be forever indebted to her for discovering a free downloadable copy of a book entitled "The Mystery of Banking" by Murray Rothbard. This was exactly what I had always been looking for. It clearly explained the process without dumbing it down in any way or obfuscating the details in order to "sustain social faith."

That is essentially how I got started in learning about money. I have found this to be the most fascinating field I have ever encountered and I am very glad that I didn't take William Grieder's advise to remain blissfully ignorant.

I couldn't believe what some of the previous readers thought about this book. I found it fascinating. The painstaking research alone is enough to make this book a tribute to the author's incredible insight on the subject matter. If you don't want to spend years studying finance, you should read this book, and you'll be able to knock heads with any MBA. As another reader commented before me, I learned more from this book than I did from 4 years of Economics study in college. If the length of this book scares you, well then, what can I say...

The Wall Street collapse in October 1987 was an unusual event. This book explains the political struggles that led to this financial crisis and how the Federal Reserve controlled our economy. Since 1912 the activities of the Federal Reserve have generally been kept secret from the people by the policies of the corporate media. People can't judge or complain about things that are unknown to them. Greider said Paul Volcker, the Fed chairman, controlled our economy through the Reagan era with tight money and high interest rates. Does the Federal Reserve Act turn over Constitutional powers to a private bank so they enrich themselves and disadvantage the people? I think the answer is "Yes". These facts are mostly censored from the censored from the history taught in schools. Corporations have vast influence on the universities and colleges in this country.

The income and payroll taxes withheld from your weekly paycheck do not go directly to the government. They are deposited in a Federal Reserve bank, and then loaned to the Federal government at interest. Every 3 months this money is turned over to the Federal government. The paper dollars (Federal Reserve Notes) are borrowed by the Federal government at interest. JFK ordered the issuance of Treasury Notes in 1963 to cut this cost of interest. After he was removed from office this policy was stopped. If this is all news to you, just where are you getting your information?

Greider points out that 19th century Americans fully understood the politics of money (p.246). Modern Americans are more ignorant ("dumbing down"). The gold standard of the 1880s was a policy to extort money from the people who had to pay paper money debts with over-valued gold (p.247). The gold standard did not guarantee stable prices. Cycles of price inflation and deflation were part of world commerce, whether the currency was gold, silver, or copper (p.248). The current problems with an unstable money supply go back to Renaissance times (p.249). Capitalism requires instability. A period of inflation to stimulate growth and wealth followed by deflation to consolidate this created wealth (p.249). No popularly elected government can have a stable price system since that leads to economic stagnation (p.250). Usurious lending was a means to expropriate land from small farmers (p.251). Chapter 8 provides a history of America you won't learn about in school books.

This 800 page book contains many other interesting facts and history in explaining the Federal Reserve. Since WW I the activities of the Fed were followed by the destruction of small and mid-size businesses. Around 1950 most small businesses in a town were locally owned and operated. Since then they are mostly chains of a large corporation or a franchised agent. Profits are taken by the few from the many. More people are wage-earners than owners of their own business.

Greider's book has a rare overriding virtue. It makes makes the unknown known. Few institutions are more remote and mysterious to the average citizen than the Federal Reserve Board. Yet few forces wield more year to year influence over our lives than this banking fraternity. The book is aptly titled. In 700 sometimes overlong pages, Greider traces the inner workings and history of the Board in terms that the average intelligent reader can comprehend. We see how decisions are weighted in favor of the have's over the have-not's. We see how interest rates can be manipulated to bring about certain results, such as damping down wages in the name of anti-inflation. We see how an unelected elite can exercise more direction over the nation's future than an elected president, as happened during the Carter administration. Is it desirable to invest such powers in a single board. Maybe. But first a goodly portion of the voting publicshould at least know what the issue is. Greider's book goes a long way in explaining the nature of the problem. I expect Greider is none to popular among economics professors for being a popularizer. But it's high time others like Greider started working that critical connecting ground between academic abstractions on one hand, and ordinary experience on the other. If you're reading this, you need to pick up the book.

Secrets of the Temple is one of the best books i have encountered on the history of US economic and monetary policy. very riveting and well-told account of how US monetary policy and regulation developed and grew into the Federal Reserve system and its operations. if there is one flaw in this book, it is the overt bias toward conspiracy theory -- that the federal reserve is an institution designed to protect the owners of capital explicitly at the expense of the average person, and accordingly acts as the agent of the rich to shift the nation's wealth toward the wealthy. it is in fact designed to protect the money supply, particularly in times of economic shock - a role previously played by private US money center banks, largely in New York, until the task grew too large for their resources and their interests (for a great account of this issue, see Ron Chernow's The House of Morgan, which makes a great companion to this book). this tone is particulary strong toward! s the end of the book, and detracts from what is otherwise a very meticulous, well articulated, and solid examination. if you can place this bias aside or in perspective, you'll find this a great and informative read, and wonderful retelling of american economic development with many new insights. i highly recommend it.