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Tensions between Russia and U.S. heat up again: Which country has more to lose?

Daily Ticker

Russia is warning Ukraine that using force against pro-Kremlin separatists who have taken control over government buildings in three Ukraine cities could push the country into civil war, reports The Wall Street Journal. The warning came Tuesday from Russia's foreign ministry after Ukrainian officials accused Russia of instigating the protests and vowing to subdue them.

Supporters of former Ukraine President Victor Yanukovich launched new protests on Sunday. Crowds of several hundred people seized government buildings in east Ukraine.

Related: 'The Russians are not finished': Sanctions won't stop Putin, says Eurasia Group's Sparks

On Monday the Obama administration accused Russia of promoting separatist conflict and threatened to step up economic sanctions in response unless Russia changed its tactics. U.S. Secretary of State John Kerry reportedly called Russian Foreign Minister Sergei Lavrov to relay Washington's concern.

Related: Russian sanctions have real impact on U.S. real estate market

White House Press Secretary Jay Carney said “if Russia moves into eastern Ukraine, either covertly or overtly, this would be a very serious escalation,” according the Los Angeles Times.

No one is calling for military action and in fact, a State Department spokesperson told reporters this week the adminstration is not considering any military options.

This leaves the financial warfare of economic sanctions, but James Rickards, author of the new book The Death of Money, says there is no reason for investors (and others) to fear any real escalation.

Why?

"Russia has great ability to retaliate," he tells us in the video above. "This is exactly like the Cold War. [The U.S.] had a lot of missiles; [Russia] had a lot of missiles. No one ever fired them because there was always a second strike capability."

Rickards says we may see more U.S. "token" sanctions placed on Russia, but that's where it will end. Check out the video to see what the U.S. could do and how Russia could retaliate, and which economy is more likely to suffer greater damage if the situation were to escalate.

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