Mark Twain once said that history does not repeat itself, but it often rhymes. Right now, you are seeing a wide array of leaders at all levels of government, in the Federal Reserve, in the financial media, and of course all over Wall Street react to this current economic conundrum that we find ourselves in. And in times of economic crisis where you have inflation at 40-year highs, profit expectations at multi-decade lows, and a stock market that just came off of the worst half year since 1970. While everyday folks like you and I have to decide whether or not we are going to let the experts tell us what to think or whether we are going to at least take a look at the data ourselves.

It's popular to say don't trust what you're being told, but at the end of the day, that's what most of us do right. When push comes to shove, most people do simply choose to defer to experts. The only choice they make is which set of experts to trust and you should not blame them because everybody has their own lives, their own jobs, and their own families to worry about. Isn't the whole point of having experts that are usually very overly paid both in government and of course on Wall Street with different institutions that are paid by insane investor fees? Isn't the whole point of having all these experts to worry about things for us, Isn't it? The whole point that they're specializing in these things so that they can cover our backs and we can cover them with whatever we're doing in the economy? Isn't it enough to just defer to them every step of the way? Well, no, Sadly, it's not enough.

It never has been, and it never will be. If you are not informed on the current economic situation and you're not looking at the data yourself, I promise you you will be fleeced every step of the way. And in this video, I want to go through the statements that those in power, the so-called experts made during the Great Recession and afterwards. you can tell me if you think that they have it right.

This time, around March 28, 2007, roughly nine months before the Great Recession would start, Cbs reports that Fed Chairman Ben Bernanke told Congress that no recession is on the horizon. Bernanke stuck with the Federal Reserve's assessment that the economy is likely to grow at a moderate pace over the coming quarters. He also repeated the Fed's belief that inflation also should ease in the months ahead, but he warned that underlying inflation remains quote uncomfortably high. He goes on on the other hand to say though, that consumers who proved quite resilient despite the housing slump and increases in energy prices could continue to keep spending at a pace that would make the economy grow faster than currently expected.

resilient consumers being able to outspend inflationary pressures and skyrocketing energy prices. Interesting. I don't know where we've heard this before. So resilient that the Fed thinks they can spend faster than the economy can tank.

Which means, oh, we get more growth. April 28, 2007 roughly eight months before the Great Recession would start. Feds Janet Yellen, who was then just a San Francisco Fed branch President, says U.s economic downturn possible. She was right on that.

But then she goes on to say the U.s economy grew modestly in the first quarter, but should accelerate in the second half of the year. She said in a speech to the American Academy of Arts and Sciences and the American Philosophical Society context, the Us economy had grown very, very slowly in Q1 of 2007, which combined with oil prices and overall food prices and daily commodity prices skyrocketing had caused a lot of fears that, hey, we were heading for a shallow recession. And then as time moved on, you started hearing more and more about the subprime mortgage crisis. And with your average American consumer starting to get really pissed off, especially at gas prices, they started demanding some explanations from those in power, so officials couldn't completely ignore it anymore, but they still try to downplay the risks.

Here's what she said: Quote: I do think there are downside risks to the American economic growth, but in spite of those risks, I really think it is quite likely that the U.s economy is going to pick up steam and revert back to trend growth before 2007 comes to an end. Sadly, that was wrong and the biggest recession that we had had since World War Ii actually started before the end of 2007. But to be fair, that was the last we heard of Janet Yellen. She would never again be given a higher position of power.

well, besides this time, and then also this time. Okay, but at least she learned her lesson. Well, not exactly. Unfortunately, July 27, 2007 New York Times reports global markets tumble as credit worries deepen.

Wall Street suffered its second biggest plunge of the year, leading global markets lower amid increasing uneasiness about the mortgage and corporate lending markets. A Cio of a big firm at that time said there is fear but not fear of a recession. Yes, financial markets are having a bad year, but this is pretty contained to just financial markets. People are worried about the tightening of financial conditions, People are worried about the subprime mortgage crisis starting to cascade a little bit more.

But overall, no consumer recession. no earnings recession. It's just a financial crisis that's very contained. You're not going to see the consumer experience much of a recession at all.

The consumer is resilient. It's just Wall Street that's feeling a little bit of pain and fear right now. November 24th, Around five weeks before the recession started, New York Times reported the Federal Reserve Board forecast this week that there will be no recession in the United States in the foreseeable future. No recession in the foreseeable future.

If only they had gone to a good optometrist, maybe they could have seen more than a couple days away. They said Gdp will grow by as little as 1.6 percent in 2008, but the Fed is confident that growth will accelerate after that. Of course, neither of those predictions came true. December 17, 2007 Wall Street Journal ran an article Why economists are betting that a recession won't happen.

A lot of the underlying resilience of the U.s economy seems a bit underappreciated, says Citigroup economist Stephen Whiting Quote: It's not clear that this is so large a burden that we can't muddle through this December 21st, 2007 during a period of time that would later be declared as already recessionary. Goldman's chief investment strategist, Cohen, tells paper that the U.s a recession in the U.s is unlikely. Quote: That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession.

She goes on to say, I am increasingly optimistic when we are into 2008 that everyone will see that the central banks did the right thing one day later. at the very end of 2007. Charlie, who had just finished biting people's fingers for youtube views before the invention of fiery thumbnails, warned that it's time to take a moment's break from worrying about this recession because we have a brand deal. Take a look at this heat map here.

Apple Red. Amazon Red Crypto isn't on here. Thank God because I don't even want to talk about that. but take a look over here at this green while everything else is down 20, 30, 40.

Art auction sales are actually up 32 for the year. In fact, the New York Times just called fine Art quote bulletproof. But art isn't just about stability. it's also handed some pretty insane returns to investors like this Marilyn Monroe painting which originally bought for five thousand, sold this summer for a whopping 195 million.

That's an annualized roi of about 21 over 55 years off. But what about inflation, Charlie? Well, contemporary art has outpaced both Gold and the S P when inflation is above 3. We saw the same sort of resilience during the start of Covet, when Arts returns beat hedge funds, real estate, and private equity according to a 2020 report from city. Unfortunately though, up until recently, most investors did not have a key piece of the puzzle, a way to actually invest in art.

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So if you do want to join the thousands of our subscribers already on Masterworks, I will put a link down below and it will allow you to get Vip access and skip the waiting list anyways. Thank you Masterworks for sponsoring us today. Now back to the content. So going into 2008, as the crisis started spiraling, leaders still did not acknowledge the recession and it wouldn't be declared for a year later that the recession actually started in December of 2007.

the average American was already feeling the pain, but they were told again and again that hey, you're just a bunch of whiners. The American consumer was expected to pay spiraling prices and completely ignore all of these economic conundrums that were happening in households on their local block. The 2008 stock market starts off rocky. The New York Times reports stocks plunge worldwide on fears of the Us recession.

January 28th, the Wall Street Journal runs a smug article saying the economy is fine. It starts with quote. It is hard to imagine any time in history when such rampant pessimism about the economy has existed with so little evidence of serious trouble. Tell me you haven't read a lot of articles like this as people quote.

Oh, we have record low unemployment, but the stock market's down and there's no evidence for the stock market to be down. Just record high inflation. Record low Employment Record low profit Expectations record: Low consumer confidence and of course, record high. Charlie Gray Harris.

February 13, 2008 Cnn reports that President Bush signed the Economic Stimulus Act of 2008. He called it a quote booster shot for the American economy. Again, history may not repeat itself exactly, but it certainly rhymes. government hopes.

The measure, which will send most Americans tax rebate checks by May, will either prevent a recession or make one relatively brief. It, of course, didn't either of those things. A few days later, February 27, 2008, Npr reports Fed Chairman Ben Bernanke went to Capitol Hill and continued to say he sees no recession again. At this point, we were already in a recession.

Recessions are always declared in hindsight, right? and it creates this really crazy dynamic where when you get the recessionary data, the people that are in charge can say, oh, well, Actually, you're looking at old data. We're no longer in a recession. Yeah, the last couple months were bad. Last couple quarters were bad, but that's old data.

We're in a new period now. and when you're actually in the quarter that's going to be recessionary. They could say hey, you can't say we're in a recession yet because we haven't gotten the data. But the context was the Fed had acknowledged that the economy was slowing down and they had cut rates in December, but they were struggling with how much they could actually cut rates because inflationary pressures were still heating up quote.

The Fed also faces a challenge from inflation, partly fueled by oil prices at 100 barrel that could restrain its ability to cut interest rates. Further, oil prices don't have to come down to reduce inflationary pressure, they just have to flatten out. And then when Bernanke was asked what happens if they don't flatten out, he said, well, if they continue to rise at this pace, it's going to be creating a very difficult problem for our economy, because on the one hand it's going to generate more inflation, but it's also going to create more weakness. Guess what's happening right now? Sounds just like what's happening right now.

So the challenge the Fed faces right now, whether to fight inflation or keep cutting interest rates to support a weak economy could get even tougher. March 2008: Bear Stearns collapses. The Fed steps in as a lender of last resort, and eventually ends up brokering a deal with Jp Morgan two essentially to essentially, by extension, bail out Bear Stearns. Many economists have argued that this action from the Fed set the stage for bigger banks to prepare less, knowing that the Fed would just step in if they ended up collapsing.

And then in April of 2008, you start having reports spread across the economy of layoffs. Although companies don't say it's because of a downturn, they say it's just restructuring. If they said it was because of a downturn, what would happen. Well, shareholders would freak out.

Does that sound familiar? Companies not wanting to say how bad things are because it's going to upset the shareholders? June 28, 2008 The Los Angeles Times asked what if oil hits 200 As oil prices continue to not flatten out as Fed leadership had expected, it becomes an increasingly volatile talking point as Americans are pissed they have to pay so much at the gas pump. That same month, Cbs reported that the U.s economy remained generally weak heading into the summer. That's new snapshot of business conditions cited two big sore spots for the economy: less less economic activity coupled with high energy and food prices. Those rising prices carry the risk of both spreading inflation and putting another drag on the overall economic growth.

And then all hell broke loose in the fall. the U.s seized mortgage giants Fannie Mae and Freddie Mac. the Lehman Brothers collapsed September 15th, aig, had to get bailed out so on, and so forth. You know the story.

November 4th, 2008: Abc reports that the Fed hires a failed bank executive from the collapsed bank, Bear Stearns. Abc makes the comparison that the Fed just hired the guy that was in charge of yelling iceberg before the Titanic hit it. He did such a good job spotting that iceberg. Maybe we should hire him to spot other icebergs.

December 1st, 2008: What most people by this time already know: a recession is officially declared and it started a year earlier. most of the first couple quarters Americans had to hear over and over again. Oh no, you're just whining. Oh no, this isn't a recession.

Oh no, it's just a small slowdown. What you're feeling in your bank accounts, What you're feeling with your lack of increasing income. That is all in your head. And then all of a sudden boom, it's officially declared we were in a recession that entire year.

Then you have the swapping of Presidential administrations as President Obama won that last election and he takes over, and he reappoints Ben Bernanke as Chairman, who continues to see at that time what was the most unprecedented period of monetary policy expansion and Central Bank authority expansion that the world had ever seen. In fact, by March of 2009, the Fed had committed 7.77 trillion to rescuing the financial system more than half the value of everything produced in the U.s that year. And while Ben Bernanke is often looked at as the guy who did his best under pretty bad conditions which a lot of the problems had actually been handed to him by the previous Fed chairman, Alan Greenspan, the truth is that still, by December 2010, public opinion on central banks had hit low points, and Bloomberg reported that more than half of the U.s won at the Fed power curbed or completely abolished, and the Us responded by doing what in the next decade, well, continuing to dramatically expand the power of the Fed, in fact, under Jerome Powell, the Fed's balance sheet would triple what it was during the peak of 2009. now again, I want to be clear: Two completely different time periods.

two completely different scenarios in many different aspects. But Mark Twain saying that history doesn't necessarily repeat itself, but it does rhyme is arguably very, very relevant here. I'm not saying that I have all the answers or that I would have known what to do in these people's shoes and they were facing a very, very difficult crisis. But if you think that the experts have your back and they are not just reacting to whatever they are seeing on a day-to-day basis, you may have another thing coming.

You may be very, very disappointed as time goes on. In my research, I have found this trend: Number One Officials first start by downplaying the risks of whatever new problem that you're dealing with. Then they overvalue the cures they are presenting to fix these issues and they oversell them. Then Wall Street plays the mitigation game, trying to calm investors to stay in their funds and their companies.

And then the crisis really starts breaking out and officials in Wall Street say, hey, we could not have seen this coming. You can't blame us And then they stop giving guidance because oh, things are uncertain. Everything remains uncertain. You can't blame us if we meet or don't meet or completely blow out your expectations.

To the downside, then all of a sudden massive monetary and fiscal stimulus comes in. The problem gets pushed further down the road and then you get a rinse and repeat. But anyways, folks that caps off this video let me know what you think down below. Did the experts have it right this time? Did they learn their lesson? Thank you again Masterworks for sponsoring us today.

Make sure to learn more about investing in art with our link down below. Have a good rest of your day folks and I'll see you in the next video.