Holden Caulfield is the narrator of J D Salinger's Catcher in the Rye. He is searching for something but, at this stage, has no idea what it is. He is something of an outsider, looking in. He feels his isolation intensely and, although he does reveal a self-awareness, his confusion about his place - or anybody's place - in the world, is intensified by his assessment of the people around him and of himself.
Being "the most terrific liar you ever saw in your life," exposes Caulfield's own desire to fit in somewhere - although he does not know where. He despises "phony" people, such as "this guy Ossenburger," an ex-pupil at Pencey who made his money, ironically, from the misfortune of others by being an undertaker and actually, "asking Jesus to send him a few more stiffs." It is Ossenburger's selfishness and inflated self-importance that motivates him.
Caulfield enjoys it when self-seekers such as Ossenburger are embarrassed because their lack of sincerity needs to be exposed. People during times of grief are vulnerable. The way the school has elevated the position of Ossenburger - by naming a school hall after him- shows how the school are implicit in Ossenburger's insincerity and that means that the school staff act phony to serve their own purposes - a donation for the school is what has motivated them, regardless of the source of the funds.
The quote goes a long way in distinguishing between genuine and "phony" and the reader is reminded that, at some stage, most people will act from selfishness (like the school) or obligation and not from any genuine interest or feelings. Hence, a reason why so many people are motivated to behave this way- because it releases them from their duty. Feigned interest allows people to interact without involvement; therefore fulfilling any social responsibility but ensuring that there is no commensurate accountability.
Salinger reveals, through Caulfield, that few people are honest all of the time because, in some instances, it makes no difference and no harm is done. It is easier to tell people that you are "going to the opera," because it will probably stilt conversation and prevent people from asking too many questions. This is how Caulfield justifies this "awful" habit of which he is, apparently, wholly guilty. He even seems irritated that Spencer believes him when he tells him (Spencer) that he is going to the gym to fetch his things when he does not keep his equipment there. Spencer is also a phony in Caulfield's eyes and so deceiving him is to be expected.
Another instance of blatant insincerity is the movies. Caulfield admits that, although they promote false images and perceptions and he "hates them, like a poison," he does accept that they serve a purpose in entertaining people, himself included. Even Ernie, the piano player, who no longer plays the piano with any passion, keeps playing. Not being genuine also allows people to hide behind a facade.
Caulfield despises himself for lying too or for being "phony" although in some instances feels it is justified, such as when he shakes hands with Ackly even though Ackly has just refused to help him out. Caulfield does, however, feel a sense of responsibility and understands that others can be hurt by "phonies" and wishes he could be the one to protect all the children. He interprets this through his image of children running too close to the edge in a field of rye where he is the one to stop them from running over the cliff.