Shawn
Open Premiere Elements 12/12.1 to the Expert workspace.
Cascade Windows for the project and the computer desktop.
Drag a computer desktop jpg photo from the desktop into an opened Video Track 1.
Does Project Assets pop open containing a copy of the file that has been dragged to the Timeline?
We will be watching for your progress.
Thanks.
ATR
Add On...depending on the results, look into toggling the Pin Icon at the top right of Project Assets.
To the right of the Panel Options Icon. But, work on the first suggestion first.