In an interview with Gillian Tett in the Financial Times of October 25, 2013 (behind paywall), Alan Greenspan says:

Beware of success in policy. A stable, moderately growing, non-inflationary environment will create a bubble 100 per cent of the time.

The first objection to this argument is that a bubble is by definition unstable and so the term “stable” should be changed to “apparently stable”. That apart, Greenspan seems to be making inferences from just one event – the Great Moderation. From a sample size of one, inferences can be drawn in many directions, and many permutations and combinations are possible. Some possible variants are:

Creating a credit bubble is the only way to bring about a (apparently) stable, moderately growing, non-inflationary environment. A bubble is very pleasant and nice as long as it lasts; it is the hangover which is unpleasant.

Financial stability is inherently destabilizing (the Minsky critique).

If you flood the world with liquidity, the only way to make that non inflationary is to ensure that the “too much money” that you are printing is channelled into chasing “too few assets” instead of chasing “too few goods”. In other words, asset price inflation is the only way to avoid goods price inflation when you run the printing presses at high speed.

The only way to generate non-inflationary growth in an ageing fiscally challenged nation is to inflate a bubble.

Finally, not many would agree with Alan Greenspan’s self serving claim that bubble blowing can be regarded as a successful policy.