By John Titus

  • August 22, 2019 – At the annual Jackson Hole, Wyoming meeting of central bankers, Philipp Hildebrand of BlackRock presents a proposal by himself and three other BlackRock executives (including Stanley Fischer). The proposal is for “going direct” and is entitled, “Dealing with the next downturn: From unconventional monetary policy to unprecedented policy coordination” proposing “unprecedented coordination through a monetary-financed fiscal facility.” The paper advocates “going direct” when the next economic downturn takes place. What does “going direct” mean?

Going direct means the central bank finding ways to get central bank money directly in the hands of public and private sector spenders. Going direct, which can be organized in a variety of different ways, works by: 1) bypassing the interest rate channel when this traditional central bank toolkit is exhausted, and; 2) enforcing policy coordination so that the fiscal expansion does not lead to an offsetting increase in interest rates.

An extreme form of “going direct” would be an explicit and permanent monetary financing of a fiscal expansion, or so-called helicopter money.

As it turned out, the key part of the first sentence in the block quote above—”finding ways to get central bank money directly in the hands of public and private sector spenders”—was exactly what the Federal Reserve did during the pandemic that broke out just four months after BlackRock’s paper, which turned out to be the script. When the Fed vastly expanded its balance sheet during 2020, it broke with prior balance sheet expansion patterns precisely by doing so in a “way to get central bank money directly in the hands of public and private sector spenders,” as recommended in BlackRock’s “going direct” formulation.
This break from prior Federal Reserve policy is set forth in detail in two BestEvidence videos. The first is “The Fed’s Silent Takeover of the U.S.” (S2 E6), which shows that the distinguishing feature of QE in 2020 that was not at work in the previous (post-2008 crisis) QE was the expansion of the money supply in the regular economy, that is, new bank money (not new reserves, which are trapped in the reserve money circuit of the Fed and its account holders) directly into the hands of “private sector spenders.” The second video is “Quantitative Easing Is the Biggest Sham Ever” (S3 E2), which revealed how the Federal Reserve was structuring its 2020 large-scale asset purchases with reserves so as to force the mirror-image creation of bank money in the regular economy, a structure that was designed to drive up high-risk financial assets like stock market equities. (See “Summary of BestEvidence Videos.”)

Perhaps just as remarkable as the fact that the Fed followed BlackRock’s script is the fact that the Fed tapped BlackRock itself to manage three separate programs created once the pandemic hit: the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility and purchases of Agency Commercial Mortgage-Backed Securities.

For a lengthier treatment of BlackRock’s epoch-defining proposal, see
For another view, see

  • September 17, 2019 – New York Fed enters the repo market and purchases $40.8 billion of Treasuries and $11.7 billion of mortgage-backed securities. Over the next four months, it adds a total of $400 billion to the repo market. The Fed never provides any compelling reason for its first sudden massive intervention since the 2008 crisis, citing instead eminently foreseeable events such as seasonal tax payments coming due. Interestingly, the 3.5-to-1 ratio of Treasury purchases to Mortgage-Backed Securities (MBS) purchases on day one of the New York Fed’s re-entry into the repo market turns out to very nearly anticipate the balance sheet expansion pattern during the pandemic, when the ratio for 2020 is 3.3-to-1 ($2.215 trillion UST vs. $0.668 trillion MBS).
  • October 18, 2019 – Johns Hopkins teams up with the World Economic Forum and the Bill and Melinda Gates Foundation to conduct a simulation, “Event 201 Pandemic Exercise,” in which high-ranking participants simulate their responses to a worldwide coronavirus pandemic.
  • January 27, 2020 – BlackRock CEO Larry Fink and Bank of England Governor Mark Carney warn at a World Economic Forum (WEF) meeting at Davos that climate change is an investment risk. The WEF meeting also likens Quantitative Easing to steroids: “good in short dosages, but does long-term damage through weakening the skeletal system.”
  • January 29 – FOMC Minutes – “Information received since the Federal Open Market Committee met in December indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.”
  • January 29 – Former NY Fed Chief Bill Dudley comes on Bloomberg TV to explain that the stock market’s uninterrupted rise for the last three months can in no way be attributed to the Fed’s addition of $400 billion in liquidity to the repo market. The stock market, he contends, is doing well because the economy is strong. The stock market plunges less than a month later.
  • February 19 – S&P500 hits all-time high before undergoing a major decline. (See chart, “S&P500 vs. Fed Assets,” for stock market performance from Jan. 2019 – Jan. 2021.)
  • February 28 – FOMC – “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy.”
  • February 28 – Stocks suffer biggest weekly loss since 2008, but S&P500 decline is halted temporarily–before resuming on March 4. (See chart, “S&P500 vs. Fed Assets,” for stock market performance from Jan. 2019 – Jan. 2021.)
  • March 3 – FOMC – “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent.”
  • March 9, 9:36 a.m. EDT – Declines in S&P500 trigger a Level-1 market-wide circuit breaker.
  • March 11 – WHO – WHO declares coronavirus outbreak “a pandemic”
  • March 12 – The strategy of shifting blame for deteriorating economic conditions on Main Street from the actual culprit (arbitrary and draconian lockdowns) to the pretextual culprit begins: New York Fed announces massive (>$1 trillion) purchases of Treasuries “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.”
  • March 15 – FOMC – The strategy of shifting blame for deteriorating economic conditions on Main Street from the actual culprit (arbitrary and draconian lockdowns) to the pretextual culprit continues: “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected… To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion.”
  • March 15 – Fed Board of Governors – “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.”
  • March 16 – Federal Reserve – The Federal Reserve announces that “the Board has reduced reserve requirement ratios to zero percent effective on March 26”
  • March 19 – Governor Newsom of California issues “Stay Home Except for Needs” executive order, the first state governor to issue such a pandemic order.
  • March 19 – The New York Federal Reserve Bank opens swap lines supporting up to either $30 billion or $60 billion with the central banks of Australia (60), Brazil (60), Denmark (30), Korea (60), Mexico (60), Norway (30), New Zealand (30), Singapore (60) and Sweden (60).
  • March 19 – Fed balance sheet: $4.72 trillion
  • March 22 – S&P500 decline bottoms out at 2237.
  • March 22 through April 9 – The New York Federal Reserve Bank announces a series of lending programs putatively in response to the pandemic: Commercial Paper Funding Facility, Municipal Liquidity Facility, Primary Dealer Credit Facility, Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Term Asset-Backed Securities Loan Facility, Agency Commercial Mortgage-Backed Securities purchases, and Temporary Foreign and International Monetary Authorities (FIMA) Repo Facility
  • March 23 – FOMC – “In addition, the Committee directs the Desk to conduct overnight reverse repurchase operations (and reverse repurchase operations with maturities of more than one day when necessary to accommodate weekend, holiday, or similar trading conventions) at an offering rate of 0.00 percent, in amounts limited only by the value of Treasury securities held outright in the System Open Market Account that are available for such operations and by a per-counterparty limit of $30 billion per day.”
  • March 23 – Federal Reserve – Fed abandons previous limits on Treasury and mortgage-backed securities purchases: “The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities.”
  • March 25 – The New York Federal Reserve inks a deal with BlackRock naming the latter Manager of the commercial agency mortgage-backed security purchasing initiative undertaken in response to an FOMC directive.
  • March 26 – Fed balance sheet rises to $5.30 trillion (1-wk gain: $580 billion), S&P500 regains 400+ points to close at 2630
  • March 26 – Federal Reserve “has reduced reserve requirement ratios to zero percent effective on March 26”
  • March 27 – Congress passes Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act includes a provision that “not more than” $454 billion “shall be available to make loans and loan guarantees to, and other investments in, programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system that supports lending to eligible businesses, States, or municipalities.” No authorities ever explain why the U.S. Treasury needs to or should provide any funds to the Federal Reserve, which can create and has a history of creating trillions of dollars, whether or not in response to a crisis.
  • March 26 – Record-smashing number of unemployment insurance claims filed. See Chart, “Initial Claims, Weekly Unemployment Insurance”
  • April 6 – Federal Reserve announces three new lending facilities to implement CARES Act:
    • Paycheck Protection Program Liquidity Facility (PPPFL) – will purchase Payment Protection Program (PPP) loans from lenders, freeing those banks to continue lending under the PPP, and most crucially, removing these non-performing loans from the balance sheets of private industry
    • Main Street Business Lending Program – will purchase $600 billion of debt from companies employing up to 10,000 workers or with revenues of less than $2.5 billion, with any required payments on these loans deferred a year
    • Municipal Liquidity Facility – will purchase $500 billion of debt from states and cities with populations over 1 million
  • April 10 – “Between March 18 and April 10, as the U.S. employment rate approached 15 percent, the combined wealth of America’s billionaires increased by $282 billion — nearly a 10 percent increase.”
    (See chart, “S&P500 vs. Fed Assets,” for stock market performance from Jan. 2019 – Jan. 2021.)
  • April 12 – Minneapolis Fed President Neel Kashkari appears on Face the Nation and warns that the health of the economy hinges on “the course of the virus,” and says the country should be focused on an 18-month timeline.
  • April 24 – Fed discloses that it has provided $85 billion in funding via three of its programs: $51 billion in outstanding loans under the money market mutual fund facility (MMLF), $34.5 billion under the primary dealer credit facility (PDCF) and $249 million under the commercial paper funding facility (CPFF)
  • April 28 – FOMC – “Financial conditions had shown notable improvement over recent weeks. Equity price indexes were up substantially from the lows of late March, safe-haven demands for the dollar had receded, and measures of realized and implied volatility across markets had diminished.”

    When the Fed concluded that “financial conditions has shown notable improvement” on April 29–citing first and foremost “equity price indexes [being] up substantially”–it had added $1500 billion of U.S. Treasuries and $233 billion of mortgage-backed securities to its balance sheet. At the same time, the sum total of Main Street additions to its balance sheet came from Paycheck Protection Loans, which then stood at $19 billion. For an explanation of how every dollar that the Fed creates to buy Treasuries and mortgage-backed securities is designed for non-bank financial companies to dump those lower-yielding assets (by selling them to the Fed) and to replace them with higher-yielding assets (like equities, specifically cited by the Fed here), see “Quantitative Easing Is the Biggest Sham Ever,”

  • May 8 – The Bureau of Labor Statistics reports that total nonfarm payroll employment fell by 20.5 million in April and the unemployment rate rose to 14.7 percent. This is the largest one-month decline in employment and the highest unemployment rate in the history of these series (seasonally adjusted data are available back to 1948).
  • May 18 – Congressional report on CARES (1st): “to date, the Treasury has only disbursed $37.5 billion of CARES Act funds, which were invested in the Fed’s Secondary Market Corporate Credit Facility (SMCCF) on May 11.” The SMCCF allows for the purchase of corporate ETFs and is run by BlackRock, which sells corporate ETFs in the ordinary course of its business.

    The report propounds a series of questions to the Treasury and the Fed about the implementation of pandemic relief legislation (e.g., CARES), including a question about BlackRock: “The Fed has hired the firm BlackRock to serve as an investment manager for this facility. How is the Fed ensuring BlackRock is acting in the best interest of the Fed and the public?”

  • May 28 – CDC reports 100,000 coronavirus deaths.

  • May 29 – Federal Reserve reports annual aggregate liabilities of financial sector at $21.2 trillion (an increase of 2.7% over the previous year). The Dodd-Frank Act requires reporting of this figure in order to prevent “a financial company from combining with another company if the resulting company’s liabilities would exceed 10 percent of the aggregate consolidated liabilities of all financial companies.”

  • June – BlackRock publishes Philipp Hildebrand’s “Policy revolution,” which fleshes out its “going direct” initiative to the Federal Reserve the previous year. “Policy revolution” provides express guidance that is directly relevant to the pandemic response seen throughout western governments:

    There are three main aspects to this revolution. First, the new set of policies are explicitly attempting to “go direct” – bypassing financial sector transmission and instead finding more direct pipes to deliver liquidity to households and businesses. Second, there is an explicit blurring of fiscal and monetary policies. Third, government support for companies comes with stringent conditions, opening the door to unprecedented government intervention in the functioning of financial markets and in corporate governance.

  • June 4 – Former Goldman Sachs trader Jim Cramer of CNBC states: “I think we’re looking at a V-shaped recovery in the stock market, and that has almost nothing to do with a V-shaped recovery in the economy.” The two very different fates for different segments of the economy under the pandemic and attendant lockdowns, he says, has amounted to “one of the greatest wealth transfers in history.”
  • June 5 – The Bureau of Labor Statistics reports that total nonfarm payroll employment rose 2.5 million in May and the unemployment rate declined to 13.3 percent. The expectations were for a loss of over 8 million jobs and an increase of the unemployment rate to 19.7 percent.
  • June 8 – Steven Mnuchin and Jerome Powell provide responses of U.S. Treasury and Federal Reserve to congressional questions propounded in the first congressional oversight report (see May 18 timeline entry). In response to congress’s question about making sure BlackRock is acting “in the best interest of the Fed and the public,” Mnuchin and Powell confirm that BlackRock is acting solely in the interests of the New York Fed–a private bank: “The Federal Reserve Bank of New York (‘FRBNY’) is the sole managing member of the CCF. Pursuant to the [investment management agreement], BlackRock acts as a fiduciary to the CCF in performing investment management services.”
  • June 18 – Congressional report: “In the eleven-plus weeks since the CARES Act became law, the Treasury and the Federal Reserve have announced how they plan to use $195 billion of the $454 billion specifically allocated…. To date, the majority of those lending facilities are not operational, and the facilities have made a total of $6.7 billion in purchases.” Of the $6.7 billion, $5.5 billion (see p. 5 from link below) came from the Fed’s purchases of corporate bond ETFs under the Secondary Market Corporate Credit Facility run by BlackRock. The other $1.2 billion came under the Municipal Liquidity Facility from “a single purchase of $1.2 billion in notes from the State of Illinois.” (p. 6 from link below)

    The report continues: “In some areas of the economy, such as the ability of larger companies to issue debt to continue operations, the agencies’ actions have had a clear and powerful impact. But there is less evidence that the actions of the Treasury and the Federal Reserve have been as beneficial for small and mid-sized businesses and state and local governments.”

  • June 30 – With the Fed’s balance sheet having increased since March by over $2.2 trillion due to purchases of Treasuries and mortgage-backed securities, and less than $150 billion due to section 13(3) emergency lending programs for Main Street, Fed Chairman Jerome Powell testifies before House: “The tools that the Federal Reserve is using under its 13(3) authority are for times of emergency, such as the ones we have been living through. When economic and financial conditions improve, we will put these tools back in the toolbox.” In other words, the Fed’s purchases of Treasuries and MBS are permanent, as Dudley forecasted on June 22.
  • July 4 – President Trump signs extension of the Paycheck Protection Program.
  • August 13 – Lael Brainard, a Governor on the Federal Reserve Board since 2014, gives a speech about central bank digital currencies in which she reveals that the Fed is considering the vast expansion of legal tender to include more than just Federal Reserve Notes:

    It is important to understand how the existing provisions of the Federal Reserve Act with regard to currency issuance apply to a CBDC and whether a CBDC would have legal tender status, depending on the design. The Federal Reserve has not made a decision whether to undertake such a significant policy process, as we are taking the time and effort to understand the significant implications of digital currencies and CBDCs around the globe.

  • October 19 – IMF hosts online symposium, “Cross-Border Payments—A Vision for the Future,” a panel of four monetary authorities including Agustin Carstens, General Manager of the Bank for International Settlements (BIS) and Federal Reserve Chairman Jerome Powell. The discussion turns on central bank digital currencies (CBDCs), which are the third type of liability on central banks balance sheet (the first two being cash and reserves). The BIS comes out strongly in favor of CBDCs because (among other reasons cited by Carstens) “the central bank will have absolute control on the rules and regulations that will determine the use of [CBDCs], and we will have the technology to enforce that.” (IMF website with embedded video of symposium) (video only)

  • November 9 – The World Economic Forum hosts the three-day Green Horizon Summit, which unabashedly promotes the neoliberal takeover of public resources by private actors under a flimsy green cover: “It’s time to reset the relationship between finance and the real economy. It’s time for public and private finance to get behind the transition to a sustainable and resilient future for all. The green transition is both an urgent existential imperative, as well as a significant commercial opportunity.”
  • November 16 – Pentagon fails third audit and thereby “remains the only government agency that has yet to pass an audit.”
    After the Pentagon’s first audit failure in 2017, Professor Mark Skidmore of Michigan State examined some of the audit records and discovered $21 trillion of “undocumented adjustments.” The Pentagon’s three-peat of audit failures is especially remarkable in view the Pentagon’s ability to maintain two sets of books per FASAB-56.
  • December 21 – With unemployment benefits set to expire for 12 million Americans, Congress passed a $900 billion rescue package that includes provisions “to accelerate vaccine distribution.” The bill extended benefits for 11 weeks [to March 13, 2021] despite bipartisan agreement on a 16-week extension.
  • December 31 – Farmers finish banner year thanks to government checks. “Thanks to the government paying nearly 40% of their income, U.S. farmers are expected to end 2020 with higher profit than 2019 and the best net income in seven years, the Department of Agriculture said. Excluding USDA loans and insurance indemnity payments made by the Federal Crop Insurance Corporation, farmers are expected to receive $46.5 billion from the government, the largest direct-to-farm payment ever. That includes $32.4 billion in assistance through coronavirus pandemic relief food assistance and Paycheck Protection Program payments to farmers.”