JOHN METAXAS, CNNfn ANCHOR, "TRADING PLACES" You have always been one who has urged investors to keep their heads. What's your advice in this economic environment?

ROBERT GOODMAN, PUTNAM INVESTMENTS: Well, that's the exact advice you gave a long-term investor. Most of what I've been listening to today and last night really affects traders. Believe me, traders have to take what the market gives themselves day-to-day. The worst thing that a long-term investor could do now is alter a sound investment strategy. Quite frankly, the fundamentals in the United States have not been better in 50 years. And I focus on those fundamentals. What we're getting now is typical at this stage of a business cycle. It's a market correction. It's being exacerbated by a lot of these short-term concerns, both political and economic.

LAUREN THIERRY, CNNfn ANCHOR, "TRADING PLACES": Tell me what you see in the trade balance -- it seems to be deteriorating again so far. Tell me what effect that has on markets.

GOODMAN: Well, again, this has been predictable. Based upon currency moves, we're seeing the real effects of the trade situation. Real imports into the United States are increasing. Real exports are slowing down. Our real trade deficit is widening and probably will remain wide for the next several months. That's a drag on total economic activity. So we're getting a normal cyclical slowdown in the United States.

What's very instructive, however, here, is that with all the concerns abroad, we don't see the price of gold moving at all. What people are saying to us now is that the dollar is a better investment than gold, and the assessment of investors worldwide is the place to be. The market to be in is in the United States. We've emerged as the strongest economy in the world.

METAXAS: Still, the Russian situation is putting a scare in the markets. How long do you think before Russia stabilizes, if at all?

GOODMAN: Well, you know, I haven't been very sanguine about the Russian situation for a number of years. The reason is the Russians are trying to do something virtually impossible. And that has put capitalism together with a democracy, two incompatible systems. I don't foresee any kind of collapse, and there will be some stabilization, but I would look for this experiment with capitalism to be modified and maybe to return to something like the old model.

METAXAS: Excuse me, I'm not sure I understand. Capitalism and democracy are inconsistent?

GOODMAN: They are incompatible systems, because capitalism creates classes based on productivity, whereas democracy tries to make things the same and to make things even and fair. There's a tug-of-war between the two systems, and I don't think the Russians understand these two systems as well as we do. And I'm afraid that experiment is doomed to failure.

THIERRY: In other words, we here in the United States have managed to find some sort of a balance between those two. And Russia is not managing to find the balance. In fact, there seems to be some sort of move there, perhaps, to have Yeltsin's ouster. And what then could occur?

GOODMAN: Again, I think there will be some experiment with modifying capitalism as we know it. They may try and adopt the old model. The Russian people just don't understand the fact that capitalism is cruel. It's a mean, nasty system, predicated on the law of the jungle. It does give you lots of growth at low cost, but the distribution of the income and wealth will not be perceived as being fair. Economically, Russia is about as important to the United States as a small Latin American country. It's the political concerns that have got investors worried. And it's really a political, not an economic concern.