Former U.S. Federal Reserve Chairman Alan Greenspan warned on Wednesday a global satiation in liquidity would bring a fall in asset prices.

The former Federal Reserve chairman made the remarks while addressing a conference in Seoul sponsored by the Financial Times newspaper via satellite from the United States.

Greenspan, who stepped down from the powerful post earlier this year, said the market value of assets worldwide had been rising faster than nominal gross domestic product globally due to a fall in real long-term interest rates over the years and a significant fall in real equity premiums.

"A good part of this expansion is a direct function of the decline in real equity premiums," Greenspan said. "That cannot go on indefinitely."

He also predicted asset prices will begin to drop, but did not specify when that would happen.

"I am reasonably certain that what we are looking at today is an abnormal situation," he added.

Source: Xinhua