US itself is self sustaining – it sources 60% of supplies locally (which is HUGE compared to what it was).

Other countries that are developing and rely on exports to the US will crumble. UNLESS they find new markets. China found new markets during the Asian crisis and Australia managed to get away from it because it was pushed by local demand – but I wouldnt be relying on local demand if I was in China.

But then if those countries do get effected severely, the rest of the world will follow – BUT not as severely. Economists will start foreseeing the overall economic performance and the countries that are next on the list will start applying fiscal and monetary policies that will cushion this.

For example: US crumbles, takes down China. China stops exporting heavily to the US, and so it ceases its demand for coal from Australia. By that time, Australian economists would have tightened fiscal policy (budget) and would cushion the fall by providing transfer payments. Countries without these types of luxuries are unlikely to have the cushioning.

Also keep in mind that Russia’s exports are spread all through the world and a recession just in the US wouldnt impact that economy as hard unless it hit the EU, which it shouldnt because the EU has trade protection from the ground up.

It helps if you don’t think of America as a single country, but think of it as one fourth of the world. America going into depression will have similar effect as Europe going into depression.

The short term investments would be a better choice with trade in period of less than a month on stable industries like construction, telecom and electronics.

You need a strong US to have a strong economy around the world. Most countries depend on the strong US dollar.