Moscow (AFP) - Russia could reduce to zero its economic dependency on the United States if Washington agreed sanctions against Moscow over Ukraine, a Kremlin aide said on Tuesday, warning that the American financial system faced a "crash" if this happened.

"We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves," said Kremlin economic aide Sergei Glazyev.

He told the RIA Novosti news agency Russia could stop using dollars for international transactions and create its own payment system using its "wonderful trade and economic relations with our partners in the East and South."

Russian firms and banks would also not return loans from American financial institutions, he said.

"An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system," he added.

He said that economic sanctions imposed by the European Union would be a "catastrophe" for Europe, saying that Russia could halt gas supplies "which would be beneficial for the Americans" and give the Russian economy a useful "impulse".

Glazyev has long been seen as among the most hawkish of the advisors to President Vladimir Putin but many observers have seen his hand in the apparent radicalisation of policy on Ukraine since the overthrow of president Viktor Yanukovych.

Economists have long mocked his apocalyptic and confrontational vision of global economics but also expressed concern that he appears to have grown in authority in recent months.

A high ranking Kremlin source told RIA Novosti that Glazyev was speaking in the capacity of an "academic" and his personal opinion did not reflect the official Kremlin policy.

Glazyev descrived the new Ukrainian authorities as "illegitimate and Russophobic", saying some members of the government were on lists of "terrorist organisations, they are criminals".

"If the authorities remain criminal then I think the people of Ukraine will get rid of them soon," he added.

Russia warns could 'reduce to zero' economic dependency on US

It's political posturing, the Russian economy would suffer greatly from sanctions, more than the Putin government could justify to the Russian people. Also Russian consumers are used to foreign goods, they'd not have a great incentive to switch to own brand alternatives. I think the markets have shown since yesterday (2014-03-04) that they don't expect war, prices are almost back to their Friday levels, although this may just be a balancing period before waiting to see what happens, I doubt either scenario (war or sanctions). At this point neither party wants an escalation, but however neither party wants to look like it backed-down first. Really shows how politics resembles a children's playground.

No offence meant to any nationality, only to all politicians :-)

If they could do this they would have already done it, decades ago when it would have been easier.