Alan Greenspan's Last Words?

FED chairman Alan Greenspan in his last speech to the annual meeting of Central Bankers in Jackson Hole WY. predicts that the housing boom and massive consumer spending will soon be over. As rates move upward Greenspan is predicting that housing market will "simmer down", prices will flatten out or possibly decline. He states that an end to the hot housing market will somehow increase consumer savings, stop consumer spending, lower demand for imports and thus miraculously lower the huge federal deficit. Just increase interest rates so home prices drop then "home equity extraction will ease and with it some of the strength in personal consumption expenditures". Wow! Home prices go down and all our financial problems stop...
No mention is made about the high price of oil nor the huge deficit caused by spending on the Iraq war. Nor does anyone seem concerned about what may happen if the housing market falls abruptly. Housing has kept the economy moving and helped avoid a major recession after the stock market tanked. If the housing market goes south you can bet we are going to see of lot of jobs go along with it.. Couple job lossess, huge energy price increases and massive budget deficits and we may have some serious problems. I find it hard to believe that Greenspan doesn't see this as a future difficulty. Seems to me the FED would be smarter if they worried more about tougher guidelines for lenders, the doubling of energy prices in the last six months and the massive federal debt. To read the full text Federal Reserve and click on "Closing Remarks by Chairman Greenspan.".