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This is what Greenspan is really worried about …

Calling it a "very unusual issue," former Fed Chairman Alan Greenspan told CNBC on Friday he's worried about the spread between 30-year and 5-year Treasury notes.

"That is the measure of the degree of long-term, very long-term, lack of confidence. And that spread is at the widest level in American history," Greenspan said in a "Squawk Box" interview.

(Read more: Fund investors drop stocks for bonds in record numbers)

The spread between the 5-year and 30-year Treasurys—which measures the difference between the yields—stood at around 218 basis points Friday. The spread became elevated during the financial crisis, and moved above 200 basis points in 2009, where it has stayed. While peaking above 300 in 2010, it remains at historically high levels.

"Typically speaking when we've been over 200, this has been connected to or associated with the onset of a recession and Fed easing," David Ader, chief Treasury strategist at CRT Capital, told CNBC.

"In this situation, we're staying over 200 even though the [Fed] easing is slowed. So this is new," he said.

Greenspan said he's also concerned about the so-called "cyclically adjusted deficit, which is draining private savings, and in fact is a major problem."

While that deficit issue and spread in Treasurys are holding back the stock market, he said, "stocks in the long-term sense are still undervalued by any objective measure."

"Let's remember," he added, "over the long-term, there's been a remarkable, stable growth rate in the stock market. It's close to 7 percent a year."

The stock market as measured by the S&P 500 has gotten off to a rough start in 2014. As of mid-session Friday, the index was off about 3.5 percent this year, following last year's banner return of 30 percent.

—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC. CNBC's Patti Domm contributed to this article. Follow her on Twitter @ pattidomm.

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