Kudrin Says Gold Can Save the World

APSwiss riot police lounging in the snow outside the World Economic Forum in Davos, Switzerland, on Wednesday.
DAVOS, Switzerland -- Finance Minister Alexei Kudrin said Wednesday that Russia and other countries with large gold and currency reserves could help the world economy weather the current crisis.

Kudrin, speaking at the World Economic Forum annual meeting, said there would be "sharp discussions" in the coming days about how countries with large reserves -- including Singapore, China and Russia -- can support the global economy by flexing the financial might of their sovereign funds.

Such funds from the Middle East, Singapore and China have been investing in major Western financial institutions that have lost billions of dollars on bad bets in the U.S. mortgage market. Rising delinquencies and defaults among mortgages have forced banks to write down the value of bonds and debt backed by the troubled loans.

Kudrin said Russia had achieved stability in recent years because of its gold and currency reserves, now the third-largest in the world.

"Of course, we have become more dependent on the world economy, and this [crisis] will affect us, but we have a good system of defense and immunity," he said. "And therefore I think it will affect us less than the leading markets."

Kudrin said the economic crisis had not yet affected his talks with investors at Davos. He said he had already spoken with the heads of companies that have projects in Russia requiring hundreds of millions of dollars in investment and that their plans had not changed.

"Russia today is seen as a sufficiently stable region for investment and, of course, Russia, like any country that has built up big gold and currency reserves, can help soften the world crisis," he said.