Book SummaryThe Creature from Jekyll Island, by G. Edward Griffin

1-Page Summary1-Page Book Summary of The Creature from Jekyll Island

In The Creature from Jekyll Island, Edward Griffin makes a case for abolishing the Federal Reserve, arguing that much of what it does is contrary to the best interests of the American people. The title of the book requires a bit of explanation: According to Griffin, the Federal Reserve System was originally designed as a banking cartel by six influential businessmen who met secretly in 1910 at a hunting lodge on Jekyll Island. Their ideas hatched the “creature” that became the Federal Reserve System.

(Shortform note: While “Jekyll Island” might sound like something out of horror fiction, thanks to the famous novel Dr. Jekyll and Mr. Hyde, the island is a real place in the state of Georgia. It was named after an English financier long before the horror novel was written. Today the island is a state park.)

As an author and filmmaker, Griffin is known as a conspiracy theorist. Among other things, his books and movies...

The Creature from Jekyll Island Summary Griffin’s Conspiracy Theories

Griffin feels that too many people dismiss conspiracy theories because they don’t believe that elite groups conspire to undermine institutions or the general public. In his view, explanations based on conspiracy tend to be more credible because they are consistent with human nature.

Humans naturally tend to be self-serving: With relatively few exceptions, they do what they think is most likely to increase their own wealth, power, or happiness. So if they think they can get ahead by forming secret alliances with other influential people (and if they think they can get away with it) then they do it. As such, Griffin believes there are always webs of conspiracy running through and behind the power structures of every civilization. The more we uncover these conspiracies and their intentions, the better we can understand history and current events.

The Bank Cartel Conspiracy

In the case of the Federal Reserve, prominent bankers wanted to form a cartel—a secret coalition that limits competition by standardizing prices and practices across supposedly-competing businesses within an industry. In this way, they hoped to increase their profits and bring the rest of the...

The Creature from Jekyll Island Summary The Problems With the Federal Reserve

Beyond his allegation that it was created through a conspiracy and continues to be run by conspiracists who probably don’t have your best interests at heart, Griffin identifies several problems with the Federal Reserve System that would warrant its abolition in and of themselves, and not because of who’s running the system.

Specifically, he argues that the Fed facilitates and legalizes certain types of fraud, destabilizes the economy by making business cycles more severe and by encouraging unwise investments, exacts a hidden tax in the form of inflation, promotes war, and enables wasteful government spending. Let’s consider each of these problems in turn.

The Fed Facilitates Fraud Through Fractional Lending

Griffin asserts that the Fed facilitates and legalizes fraud by allowing banks to engage in fractional lending. Fractional lending is when a bank keeps only a fraction of its depositors’ money on hand and loans out the rest. Fractional lending is profitable because it allows the bank to loan out more money and to charge interest on it.

But fractional lending is also akin to bluffing: The bank is gambling on the likelihood that only a fraction of its depositors...

The Creature from Jekyll Island Summary How to Abolish the Federal Reserve

Based on the problems we’ve discussed, Griffin insists that the Fed should be abolished, but he concedes that simply repealing the law that created the Fed and shutting down the system would be disastrous for the US economy. This is because the economy runs on currency issued by the Fed. If all that currency disappeared, the economy couldn’t function. So Griffin proposes a sequence of actions that would successfully abolish the Federal Reserve System and correct the problems we’ve discussed.

For one thing, since the Fed facilitates government borrowing, Griffin sees the national debt as a problem that needs to be addressed prior to closing it. He proposes having the Fed issue enough money to buy up all the treasury bonds that it doesn’t already own, effectively paying off the national debt with newly issued money.

Of course, the Fed is also responsible for managing America’s fiat currency, so before we can abolish the Fed, we need to abandon fiat currency. Griffin proposes phasing out fiat dollars in favor of a new currency backed by precious metals. We’ll call that new currency “precious metal dollars,” or PMD’s.

Once fiat dollars are fully phased out, the Fed can be shut...

Shortform Exercise: What Would You Do if the Fed Were Abolished?

Imagine that the United States decided to implement Griffin’s plan for abolishing the Federal Reserve. In this exercise, you’ll have a chance to contemplate how that might affect you personally.

As the Fed pays off the national debt, there’s going to be far more dollars in circulation all at once, causing a sudden surge of inflation, or rather devaluation of the fiat US dollar. What do you think you would do to reduce your vulnerability to inflation or devaluation at that time?