Transcription
In today's video, I want to give you an update on where this economy is actually heading. We have been distracted by earning season, by Fed press conferences, by whatever narrative the politicians are pushing this week. But we cannot ignore what the data is telling us right now.
Because when I look at the numbers, the labor market, the consumer debt situation, the delinquency trends, the oil prices, the stagflation risk sitting right in front of us, I have one thought. The writing is on the wall.
So today, I want to do something a little different. I want to take you back to the last time the writing was this clearly on the wall and show you what actually worked. I want to show you the three assets that not only survived the 2008 financial crisis, they thrived during it. And more importantly, I want to tell you why those lessons matter right now today in this economy.
Because here is the first thing you need to understand. The S&P 500 fell by over 37% in 2008. Think about that. If you had $1 million invested in the stock market going into 2008, you walked out with somewhere around $630,000. You lost nearly $400,000.
In the mainstream media, the talking heads on television, they were telling people not to panic. Stay the course. They said it's a buying opportunity. Meanwhile, millions of Americans watch their retirement accounts get cut in half. That is not a buying opportunity. That is a disaster.
But here's the thing they do not tell you. Not everyone lost. Some people made money. Some assets actually went up while the entire financial system was melting down. And if you were positioned correctly in those assets, you were just fine. You were actually better than fine.
So, let me show you exactly what those assets were. And let me explain to you in plain English why they worked and why you need to be paying very close attention to this right now.
Asset number one, gold. Take a look at this chart. In 2008, while the S&P 500 was collapsing by over 37%, gold rose by nearly 25%. Let me say that again. The stock market lost 37%. Gold gained 25%.
And if you go back just a little earlier, back to March of 2008 when Bear Sterns became the first major casualty of the financial crisis, gold had already surged to over $1,000 an ounce. That was a new all-time record at the time. It had risen over 50% in just 9 months coming into that moment. 50% in 9 months.
Now you might say, Brian, why does gold go up when everything else is falling apart? And the answer is actually simple. Gold has what is called a lack of counterparty risk. What that means in plain English is that gold does not depend on anybody else's promise to be worth something. When you hold a stock, you are trusting that company to perform. When you hold a bond from a private company, you are trusting them not to go bankrupt. But gold does not make you any promises because it does not need to. It has been a store of value for thousands of years. And when people lose faith in the financial system, which is exactly what happened in 2008, they run to gold. It is a no-brainer.
Now, here is what is really interesting. They are living in ignorance, living in bliss. If they think the conditions we are seeing right now are fundamentally different from what we were seeing heading into 2008. We have a labor market that just posted a loss of 92,000 jobs. We have delinquency rates on credit cards that have doubled from 4% in 2022 to 8% at the end of 2025. We have consumer debt at record highs. We have oil prices pushing toward $90 a barrel because of the Strait of Hormuz situation. And we have a Federal Reserve that is paralyzed, caught between rising inflation and a weakening labor market. That is a recipe for a flight to safety. And historically, when there is a flight to safety, gold is where the money goes.
Asset number two, US Treasury bonds. Listen, I know when most people hear the word bonds, their eyes glaze over. They think bonds are boring. But boring made people very rich in 2008. So pay attention.
Long-term US Treasury bonds gained more than 27% in 2008. 27% while the stock market was down 37%. That is a swing of over 64 percentage points in your favor compared to someone who stayed fully invested in equities. And global bonds as a whole returned around 12% that same year.
Now, why does this happen? It is actually pretty straightforward. When the economy starts to fall apart, when banks are failing, when credit markets are seizing up, investors panic and they run into the safest thing they can find. And the safest thing in the world, the ultimate safe haven asset is US Treasury bonds. Because the US government, whatever its problems, is not going to default on its debt. At least not in the traditional sense. So when fear takes over the market, demand for Treasury bonds skyrockets. And when demand for bonds goes up, the price goes up. It is as simple as that.
Now, here is where it gets really important for today. Look at the CME Fed Watch tool. Right now, there is a 95.9% chance the Federal Reserve will not cut interest rates at the next meeting. And on top of that, Jerome Powell himself has acknowledged that core inflation is sitting at 3.1%, well above the 2% target they have been chasing for 5 years. 5 years of inflation above target. That is propaganda when they tell you they have it under control. And the Federal Reserve's own updated projections now show they expect inflation to end the year at 2.7%, not the 2.4% they were projecting back in December. They are losing the battle and they know it.
But here is the other side of that coin. The labor market is deteriorating fast. 92,000 jobs lost in February. Transportation sector job cuts are up 872% compared to last year. Manufacturing cuts are up 143%. That is not a healthy labor market. That is a crumbling one. And when you have rising inflation on one side and a collapsing labor market on the other side, that is not just a recession. That is stagflation. And stagflation is the nightmare scenario for the Federal Reserve because they cannot fix both problems at once. They cannot raise rates to fight inflation without crushing the job market even further. And they cannot cut rates to save jobs without pouring gasoline on inflation. They are trapped.
So the question becomes, when institutions figure out that the Fed is trapped, where does the money go? You already know the answer. It goes into Treasury bonds. It goes into gold. And it goes into the third asset I want to talk about today.
But first, let me ask you a question on your behalf. You might say, Brian, okay, this is all very grim, but why is this happening? Why are we in this situation? How did we get here? Let me show you. The answer is not complicated. It just requires you to ignore the propaganda.
We are being told by politicians from both parties that we are living in an era of economic strength, low unemployment, manageable inflation, strong wage growth. But you might say, Brian, what are you talking about? The data does not support that at all. Not even close. Wage growth is trending down. Unemployment is trending up. Credit card delinquencies have doubled in three years. 25% of all student loan borrowers are now delinquent. A record 6% of 401k participants made hardship withdrawals last year, raiding their own retirement savings just to pay for basic expenses like avoiding eviction or covering medical bills. These are not the statistics of a golden age. They are the statistics of a population under severe financial pressure.
And the root cause, if you want to know the truth, is not the politicians, though they deserve their share of blame. The root cause is the Federal Reserve printing money to fund a decade of government overspending. They printed the money. They flooded the system with liquidity. They kept interest rates at zero for too long. And they created an inflation problem that they have now been unable to solve for 5 years running. And now they are talking about cutting rates again, potentially as early as June, because a Trump-appointed Fed chair is going to take over in May. And my prediction is that the new Fed chair is going to find a justification to cut, probably pointing to the weakening labor market, and they are going to call any remaining inflation transitory or temporary. We have heard that word before, and they are going to cut anyway. And when they do, that is going to be rocket fuel for gold and for the third asset I am about to show you.
Asset number three, consumer staple stocks. Take a look at this data. In 2008, when the entire stock market was falling apart, only two stocks out of all 30 components of the Dow Jones Industrial Average finished the year with a positive return. Two out of 30. Do you know which two stocks those were? Walmart and McDonald's. That is it. Every other major blue chip company lost money. But Walmart went up. McDonald's went up.
And the reason is devastatingly simple. When the economy collapses, people still have to eat. People still have to buy toilet paper and laundry detergent and diapers. They cannot cut those expenses. What they can cut is their Netflix subscription. What they can cut is the restaurant they used to go to on Friday nights. What they can do is trade down from expensive brands to cheaper ones, from fancy restaurants to McDonald's, from upscale grocery stores to Walmart. And that trade-down behavior actually sends more money directly into these companies during a crisis.
Look at Procter & Gamble, the company behind Tide, Pampers, Gillette, and dozens of other household brands you use every single day. During the 2008 financial crisis, demand for their products barely moved because nobody stops buying soap when the economy gets bad. That company has raised its dividend for 70 consecutive years. 70 years through recessions, through crises, through wars, through pandemics. And right now, at a moment when consumer financial stress is measurably at its worst since 2017 based on household delinquency data, these kinds of companies start to look very attractive to very serious money.
And this is already starting to happen. The Consumer Staples ETF, the XLP, gained 7.5% in just the first six trading days of 2026. According to data from BTIG, that was the strongest short-term run for that sector since 2022. The institutional money, the smart money, is starting to rotate into defensive assets. They are not waiting for the recession to be officially declared. By the time it is officially declared, it is too late. The move has already been made without you.
Listen, here's the grim reality of where we are. The Federal Reserve's own projections now show slower progress on inflation. The labor market has now posted outright job losses. Artificial intelligence went from being responsible for 3% of total job cuts in 2023 to 10% of total job cuts right now. And that number is accelerating. Gasoline prices are climbing. Oil is approaching $90 a barrel with the Strait of Hormuz situation showing no signs of deescalation. Only two oil tankers passed through there in a single day recently. That is essentially a blockade. And a 95.9% probability priced into the market that the Fed will not ride to the rescue at the next meeting in April.
And you want to know what makes this all even more unsettling? The parallels to 2008 are not perfect. They never are. But the fingerprints are the same. Overleveraged consumers, deteriorating labor data, a central bank that is behind the curve, an asset bubble built on cheap money now being slowly deflated, and a political class still out there telling everybody that everything is fine while the data screams otherwise.
If this trend continues, and I see nothing on the horizon that changes the direction of these trends, we are going to be in serious trouble a year from now. The unemployment rate is on an upward trajectory. Consumer debt delinquencies are on an upward trajectory. Oil prices are on an upward trajectory. And the ability of the Fed to cut rates as a rescue mechanism is constrained because inflation is still running hot. That is stagflation. And stagflation is what takes a bad economy and turns it into a prolonged, grinding economic disaster.
So, what did we learn today? In 2008, when the S&P 500 collapsed by 37%, gold gained nearly 25%. Long-term Treasury bonds gained over 27%. And the only two stocks in the entire Dow that went up were Walmart and McDonald's because people still had to eat and buy household essentials, no matter what.
Those assets did not thrive because of luck. They thrived because they were positioned correctly for the environment that existed. And if you look honestly at the environment that exists today, stripped of the propaganda, stripped of the political spin, and just look at the raw data, you will see that the environment is beginning to rhyme very loudly with 2008.
I am not telling you what to do with your money. I am not a financial adviser, and this is not financial advice. What I am telling you is what the data says. And the data says that people who understand history and who position themselves in assets that are proven to hold value and even gain value during economic crisis are not the ones who end up raiding their 401k to cover rents. The ones raiding their 401k are the ones who believed the propaganda and stayed comfortable right up until they could not afford to anymore.
Subscribe to the channel for daily updates on the economy, the markets, and everything they are not telling you on mainstream television. Thank you so much. Have a very nice day. Take care.