The key to our economic well-being has been and will continue to be higher stock prices and the “blossoming of finance” according to former Fed chairman Alan Greenspan in this interview with Al Hunt at Bloomberg.

Higher asset prices have been the central component of his view of “prosperity”, however transient that prosperity turns out to be. Here’s a gem from about the 7 minute mark:

Remember that, the bursting of a bubble, by itself, is not a big catastrophe. We had a dot-com bubble – it burst – and the economy barely moved and the result of this is it’s hard to tell, when that bubble bursts, what the consequences will be.

Warning: This video becomes hazardous to your health just after the fall of the Berlin Wall is again cited as the root cause of the bursting housing and credit market bubble.  I became physically ill at about the 9:30 mark and had to rush to the bathroom.