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To: Serge Collins who wrote (33723)	5/12/1999 9:57:00 AM
From: Zardoz	Read Replies (1) \| Respond to of 116791

Summers replacing Rubin isn't. Now GREENSPAN leaving, that would be a big story. And Number 1 reason to buy gold!

To: Serge Collins who wrote (33723)	5/12/1999 9:57:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116791

<<Rubin resignation is a non-story. The man is grossly overrated! eom >> YES, but he may have helped hurt gold.

To: Serge Collins who wrote (33723)	5/12/1999 11:20:00 PM
From: hunchback	Respond to of 116791

Daily Economic Commentary US May 12, 1999 -------------------------------------------------------------------------------- Two Treasury Secretaries/Finance Ministers In One Day No sooner had the Kremlin announced the sacking of the Primakov government, which included the Russian Finance Minister, the White House announced the resignation of Treasury Secretary Robert Rubin. Even though I do not even know the name of the Russian finance minister, my inclination is to believe that the Kremlin announcement could have greater longer-run implications for global financial markets than the White House announcement. Why? The Kremlin announcement pertained to the entire Primakov cabinet, including Prime Minister Primakov himself. This comes at a time when the Russian Duma is about to start impeachment hearings against President Yeltsin. Primakov's designated replacement, Sergei Stepashin, may be doomed to nonconfirmation by the Duma. So, legitimately, the question could be asked: Who's in charge in Russia? We wouldn't really care about the answer except that Russia still has a lot of nuclear weapons, some of which might even work. All else the same, you would rather that there be a stable political-economic environment in a country that possesses nuclear weapons - the antithesis of what appears to be the case in Russia today. Is it possible that a new leader could emerge in Russia? A mean drunk instead of a jolly one? Nationalism is being drummed up in China, another nuclear weapons power, which is straining the Sino-U.S. relationship. Russian nationalism has been aroused by the NATO military operations in Serbia. A power vacuum, which appears to be developing in Russia, is a perfect environment (if that's not contradictory) in which to nurture that nationalism. The Republican Congress already is calling for more military spending. With a chill developing between the U.S. and China and the possibility of one developing between the U.S. and Russia, we could be talking about something akin to a Reaganesque military buildup again - at a time when domestic demand is on fire and global economic activity could be picking up. Now, to Rubin. Let's face it, although the Treasury Secretary is the chief economic spokesperson for an administration, the independent policy tools that come with the office are limited. A lot of analysts associate the strengthening in the U.S. dollar with Rubin. Correlation does not imply causation. When the dollar has moved up, Rubin has nodded in approval. But did he do anything policy-wise to get the dollar higher? The Treasury does have the authority to intervene in the currency markets, but Rubin has exercised this authority only rarely. Moreover, the preponderance of studies suggests that sterilized intervention has only a transitory effect on currency values. Rubin was the architect of the Mexican bailout, which some analysts believe was the blueprint for the Asian debacle of 1997-98. In my view, Rubin's most valuable contributions to the Clinton administration were respectability and wisdom. To the best of my knowledge, Rubin has not been the subject of any investigations for wrongdoing. He has had the wisdom to say just enough to the press to get by, and not enough to rile the markets. He has had the wisdom not to take on the vaunted Fed in public. In economic policy as in medicine, a dictum is to do no harm. With the possible exception of the Mexican bailout, Rubin has done no harm. Rubin's nominated successor, Undersecretary Summers, is very knowledgeable. It remains to be seen if he is wise. ntrs.com