By Ambrose Evans-Pritchard

DAVOS, Switzerland - January 29, 2009 - "The one reserve currency has become a danger to the world economy: that is now obvious to everybody," said Russian Prime Minister Vladimir Putin in a speech at the World Economic Forum.

It is the first time that a Russian leader has set foot in the sanctum sanctorum of global capitalism at Davos.

Mr. Putin said the leading powers should ensure an "irreversible" move towards a system of multiple reserve currencies, questioning the reliability of the U.S. dollar as a safe store of value. "The pride of Wall Street investment banks doesn't exist any more," he said.

For all his bluster, Mr. Putin's bargaining power is weakening by the day. Russia's foreign reserves have fallen by 34% since August, to $396bn (£277bn), after months of capital flight and the collapse in the price of Urals crude oil to $45 a barrel. The ruble also fell to a record low yesterday after sliding for weeks in a controlled devaluation.

Mr. Putin said, "We are witnessing a truly global crisis. The speed of development beats every record, and the strategic difference from the Great Depression is that under globalization this touches everyone. This has multiplied the destructive force. It looks exactly like the perfect storm."

The Soviet Union avoided Depression in the 1930s due to its totally closed system, although the regime inflicted other terrible hardships.

However, Mr. Putin's own government in Russia is facing mass protest as unemployment surges and austerity measures start to bite.

The Kremlin expects the Russian economy to contract by 0.2% this year. Expecting a deep global downturn, it has redrafted its budget plans based on oil prices at $41 this year, entailing drastic cuts in public spending.