gentlemen and then happy to sign books >> i want to follow up on something i heard you say. i thought you said since the abolition of the gold standard the dollar hasn't lost any of its buying power. >> no, i said it hasn't lost its power overseas in the world market. there was a terrible inflation in the 1970s. the rate of inflation generally has not been severe. it has lost about 2% a year except for that period. you can look at the figures like a dollar in 1920 is only worth 14 cents today. you know, that is really significant if you are around in 1920 and still around today. but life doesn't work that way. what happens is at a 2% rate it is barely noticeable and in some ways it is helpful. the one reason we have unemployment is for cultural reasons it is very hard to cut

people's wagesism wages. it is very hard. if there is a little bit of inflation there is a way silent way of cutting wages by not giving a raise. so a little bit of inflation is healthy. but i didn't say there has been no inflation. thank you all very much for coming out tonight. [applause] >> wednesday, booktv in prime time features books about drone warfare. scott shane talks on objective troy. a terrorist, a president and the rise of the drone.

author interview program afterwards. he will be joined in conversation. later that evening american

university for new yorker staff writer investigation of the influence of big money and politics. also joining us live on our three hour: program sunday, march 6. another taping this time with michael eric dyson. race and the obama presidency. people sit down. that is a look at some of the author programs. many of these are open to the public. investigating the finances of the catholic church. next he speaks with book tv. book, leonard pitts is local columnist and joy and read joy does with phone calls but we want to introduce gerald posner,

the author of several books, his most recent is this one, "god's bankers," the history of money and power at the vatican, was it is published by simon & schuster. by simon and schuster. do is "god's bankers"? >> guest: they change every 20 years or so but for the most part their bishops and cardinals of the catholic church and the one person who runs the vatican bank is the pulp. the only shareholder at vatican bank, they hire layman to run the details of the in and out of money but the presents and people responsible for the finances of the vatican are the same people who run the religion. >> host: how big is the vatican bank? how much money does it hold? has access? >> guest: in reverse order who has access is a group of people, by its charter was created in the middle of world war ii, has been around seven years in the

institution. citizens of vatican city, religious orders and catholic charities, in practice it has been manhandled and this used for years by everyone from wealthy italians, who has control over it, the pope is the only shareholder of the vatican bank, but in addition, the size of a small community bank, 7 to $10 billion a year, not enormous, goldman sachs pales in significance, but enough money when it is running the dark without any oversight or transparency, plenty of problems and that is what it has done. >> why was it formed during world war ii? >> he questioned the 700 page book, why was the vatican bank form, and the problems it got into, was formed in the middle of world war ii in order to avoid british and americans having a black list to stop neutral countries from working with the enemy. we were looking to stop all of these neutral countries in

europe and we have put on, we meaning the united states and britain-liechtenstein and luxembourg and san marino and monaco, switzerland, every neutral country in europe except for one, the vatican. the vatican developed its own bank, went guy can't continue to do business with the german-italian fascists, they play both sides, didn't know who was going to win so invested in both. >> what is the purpose? is a leading why do they need a bank? what is the purpose? being no purpose to it that couldn't be served. they didn't have a bank for the first 1930 years of their existence, the only reason they formed one was to circumvent the rules in world war ii but now is a matter of national pride so when pope francis came into power in 2013 he set i am going to reform it but may also abolish it, he could do so with the simple degree. and a permanent observer status at the you and they are a

sovereign entity as well as a religious entity, they like the bank because it is the equivalent of central bank, they want to keep it if nothing else because they think it burnishes the reputation of that. it does that has also cause a lot of headaches of a time. >> host: is there evidence of misuse? >> it is hard to catalog. one reason the book is so fake is the evidence chronicles that use of the bank continues decade after decade. with each successive pope saying i will clean it up, whether you have for instance in world war ii doing business with the germans and in the 1960s is misused by a group of italian bankers, one ends up debt and the london bridge, another is a businessman who ends up debt in jail. after that, 70s and 80s made a one quarter of $1 billion to restitution. and they cleaned it up. we lyndon and 90s and 2,000s

italian politicians like the prime minister to the vatican bank, and 10 civilians of dollars, everything from their wife's bullish to politicians so until the last few years has been a source of consternation and scandal for the church. >> host: where does the money come from? >> it comes from cash given by religious orders, much of the money comes in cash and is positive for the bank, back to those religious ones for the deposit, take the deposit and a safe investment. one thing i must say for the vatican bank, in the heart of london, they bought in world war ii, major shares of the top 100 companies in the 1940s and tell them for years, they don't know money because they had none of the ones in european banks and almost a commander so they're very safe on their investments. some of the money also comes from sources of the account like money launderers, the 1% of

evading taxes. in the last three years pope francis said they closed those accounts that don't exist. and the bank is down to the religious orders. >> how does the catholic church otherwise bank cannot through this bank? >> to correspondent banks. one thing before the vatican bank existed, they did need the vatican bank because they did it all for the bank of rome and the bank of england, and the banks they normally would. the problem with those banks and doing that as a country is the international banking investigators and the country's, chase manhattan, they can follow your money so if you're transferring $5 million to chase manhattan american investors in the treasury department can see where you are going, that is what the vatican wanted, they wanted their own secrecy of national bank and got it. >> what kind of problems?

>> problems you expect when dealing with billions of dollars, no transparency and lack of oversight. this is mobile corps in public. 80% of the cleric's involved in running the vatican bank over the years are well intentioned and want to do the right thing in the catholic church. what i mean is they were not always personally taking fortunes, the bishops involved in the 1970s ratings end ed up house on lake geneva and rolls-royce and rory, what they did is made money from illegal operations they stashed in to what i call their own accounts in case they could use it to gain power in the vatican. perfect example, the bishop from illinois, american archbishop came to run the vatican, knew nothing about finances, he was

loyal to the pope, and in 1970 brand for 18 years, he amassed $6 million slush fund from all these deals and used it when the polish pope came in, john paul ii came in, use it to help that polk destroy communism in his native poland and bring down solidarity, it endured the bank, built the power for the vatican bank, the money that got in from ill-gotten gains wasn't used necessarily for personal purposes but what i call lot power struggles within the vatican for power and closeness to the pope. >> host: what is the catholic church at history with money? >> guest: the reason this turns out to be, thing goodness i have a publisher who was willing to allow me to expand this book. i pitched an idea in 2005 that

this is about world war ii and the vatican and you have a 200 year history, they let me do that because every time i thought i had a story i brought it back earlier and the key part of that once the vatican's relationship to money, you find out when you go back 150 years ago they did not like the idea of capitalism. they disdained it. the bible said melinda and interest, you couldn't do it and capitalism was an idea mix with modernism, freethinking, very dangerous, autocratic rule. not only did they have disdain for capitalism but treated it as heretical protestants and jews, please borrowed money from the rothschilds, did is insane of the traditionalists but once they lost their empire, popes were not just heads of the roman catholic church the kings who ran a 15,000 square mile empire, anyone who has seen the board joys knows it all too well, they didn't look like jeremy irons, they levied taxes, collected

fees, when they lost the empire in 1870 they had to scramble to bring in money, selling indulgences, paper to forgive sins, didn't pay the bills, as the faithful to send contributions to the pope, they slowly, grudgingly embrace the concept of capitalism and in 1942 in the middle of the war when they -- they were looking at capitalism with a bit of disdain. to embrace capitalism putting it on steroids. for the next 70 years, they are engaged in what pope francis would call savage capitalism. and dramatic in the last 70 years, in the 2,000 year history. >> first of all where did you get onto this and why? >> guest: from my first book in 1986, i put out a biography of mandela, the nazi doctor. in 1984 i was done in buenos

aires, the federal police fires on mandela who persisted, and in those files i found documents about german war criminals arriving in argentina with the help of a priest in rome, father weber and the bishop and i thought to myself that is interesting. a priest and bishop, nazi war criminals. i put that in the back of my mind and said i will find a publisher who will allow me to do that subject, it put me until 2005 and ten books later to find a publisher who set all right, we're willing to let you go. vote story turned out to be very different. not getting into what and july started the book it turned out to be money, not necessarily world war ii which was also about money. if you said what is the story about would have thought was about ideology, possibly not the sympathizing. can that communism, the nazis, that was the tail.

>> host: how many books have you written? >> guest: 12 books but if i write from as slowly as this i won't have many more. good news about as you well know from authors, and i think david juergen years ago, his book about oil, he published it during the first gulf war so there was tremendous interest, i was supposed to have this done in 2011-2012 at the latest but i was running slow. we would have published under benedict but that would not be as interesting. >> host: franchise has energized the church, the idea that francis is a reforming pope, said something different from predecessors and brought attention to the catholic church for catholics and non catholics as well. it ends on a note of optimism. and the bank going forward.

and that is luck when you publish. >> host: what has francis said publicly? anything? >> guest: he said all the right things but that did not convince me he was the real deal when it came to the vatican bank because every other pope had the right things when they became pope about reforming the bank and failed to do so but when he became pope in 2013 and set i will reform the bank, i more or less said oh sure, i heard that before but changed my mind in the following way. first of all, whoever is pope today they would have to be reforming the bank, it is a quirk of finances but italy decided to go with the euro and when it did the vatican was in a quandary because they use the italian hero for their own currencies so had decided they wanted to bring their own currency or go with the euro. they didn't know when they went with the euro that brussels wanted oversight on the central

reserve vatican bank. as a result of that, the vatican attached their first-ever law against financing of terrorism in 2011 and money-laundering, they didn't have a law against money-laundering. their first flaw against how much money the dominion and disclosed in to the vatican. they had to become compliant by european standards but francis has done it with enthusiasm and vigor, she has run its independent outsiders, layman who are in fact really trying to change the culture of no transparency and make it complaint bank moving forward in the 21st century. team needs to be pope and other three four years to have the effect all the way to the bureaucracy. >> host: what is the official name of this? >> guest: institutes of works of religion. i always loved that. the institute for the works of religion is the vatican bank so sometimes, you don't go by the name of the institution, look behind the curtains to see what

it is doing. >> host: is there a physical location? >> guest: the physical location, medieval tower in vatican city, in this power is where the bank is located. it has no other branch anywhere in the world, only atms inside vatican city, the only bank in the world that has latin as one of the languages, the story of the vatican bank. >> host: could you or i open an account there? >> guest: in the battle days we could open an account if we knew they cardinal who was a friend of ours but to date we would have difficulty doing it. if you were a religious order or charity, the way around it is the following, and and seven time prime minister, died the year-and-a-half ago, the most prominent postwar politician, and opened it up an account, the cardinal spell as a man foundation, there was no such

institutional organization and the vatican bank. and ran about $60 million in cash over the years, everything from paying for his wife's jeweler to slush funds for other politicians. if you had the right connection you could get a deal. the fashion designer has his main retail showroom on a street in a row like madison avenue or fifth avenue, recently became known he was paying a couple hundred dollars a year for rent when everyone else was paying $600, he knew a cardinal was a friend to cut in the deal, that is the way the vatican has been operating for years. and the answer to the question is could we open up an account? know unless we have the right connection. >> host: how cooperative if at all was the vatican in your research? >> guest: i would like to say they were cooperative but they were not. i asked for access to the secret archives, the private archives of the pope, where