It’s no secret that tension rods have been an issue for many.
But as the United States grapples with a crisis of confidence in the global financial system and with a series of other economic challenges, the topic is coming up more and more.
That’s the result of a new report from the Federal Reserve Bank of San Francisco, which found that the US is using far more than the norm in its use of the rods in its financial system.
The Fed report says that US financial institutions spent nearly $1 trillion on tension rods between 2008 and 2016, and that those rods were used to slow the movement of capital in the financial system, and to prevent the financial systems of other countries from being destabilized.
The Fed says that the rods were also used in instances when countries were not prepared for the financial crises of the last decade.
In addition to being a tool for slowing financial markets, the rods also serve to keep the money supply in check, the Fed says.
As we’ve reported in the past, the Federal Government is moving to use more of these rods, which have been called “federal reserve gold.”
The US used a total of 1,811,764 tension rods in 2016, more than double the amount used in all of 2017.
That is more than triple the amount of tension rods used in 2009, when the US was still struggling with a recession.
This is a chart showing the number of US financial systems with at least one rod in 2016.
Source: Federal Reserve, Federal Reserve Bulletin.
(Photo by Spencer Platt/Getty Images) This isn’t the first time the Federal reserve has come to a similar conclusion.
Last October, the report found that US central banks had used the rods for at least $1.2 trillion in the first seven months of the year.
More recently, the US Department of the Treasury’s Financial Stability Oversight Council reported that the Federal government spent nearly a trillion dollars on rods during the first six months of 2017 alone.
Some financial institutions have taken a wait-and-see approach on whether they will be using them, as the Fed points out that “many countries are still not in a position to use the rods safely.”
But the Fed’s report suggests that it may be worth it.
“We think the use of tension rod in our system is a very cost-effective way to keep us safe,” said Fed President Jerome Powell.
“It has the potential to slow down the movement and increase the resilience of the financial sector.”
“It’s a matter of life and death for our financial system,” he added.
Read more about tension rods at Bloomberg Businessweek