Whether Thornberg cleared up the uncertainty remains to be seen,but he did provide was a better understanding of what is happeningright now with the recovery and where he thinks we are headed. "Inmany ways, where our economy is right now is a place where ithasn't ever been before," he said. "While it is recovering in astrong way right now, it is recovering for the wrong reasons and ismoving from a private to a public bubble."
There is no doubt that the recession is over, he said. As amatter of fact, Thornberg said that 2010 may be stronger thanpeople expect. But what is driving the economic recovery, he said,is the most aggressive fiscal and monetary policy we have everseen. "This is a problem because these policies are creating a newbubble, rather than allowing us to fully recover from the lastone," Thornberg said.
California is basically stabilized overall, but the state'sproblems "aren't solved, they are simply hidden," according toThornberg. What is worrisome to him is consumer spending, which asa percentage income is at an all-time high. "We haven't solved ourspending binge," he said, "we have hidden it, and we can't do thisforever."
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