Global financial crisis may hit hardest outside U.S.

At the same time, a model of globalization that depended upon the U.S. as the consumer of last resort has broken down. American households have lost an estimated $5 trillion in wealth from the housing market collapse, which will cut annual consumption by more than $400 billion, according to the Center for Economic and Policy Research.

That means foreign factories can expect to sell significantly fewer toys, clothes and electronics to U.S. consumers.

Over time, countries such as China or South Korea could reorient their economies to rely more upon domestic consumption. But that transformation, once expected to occur over several years, now needs to happen immediately to replace vanishing export orders.

"The export model that's so dominant in the emerging markets is at risk. That's the vulnerability in the international system. …We're seeing an end to that model of globalization," says David Smick, a global financial strategist based in Washington, D.C.

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