Finance, Forex and Investments

What would happen to developing nation (India/China etc) stocks if the US economy crashed severely?

It's my opinion that the US economy is heading for a major economic crash, perhaps even another great depression. I was just wondering what would happen to an index fund that was invested in emerging markets (such as India/China/Russia etc) if the US economy crashed heavily - both in the short term and long term.

Public Comments

1. Dealing with individual enterprises is easier than indexes. Individual enterprises may be immune or severely involved. indexes are almost always hit at least at first. When markets tumble, we often see a flight to security... stocks perceived to be less at risk rise as funds are moved from more risky to less risky stocks. Then, when recovery starts those stocks that benefit from flight to security are likely to decline as money rushes after faster moving stocks. If investors try to move large amount of money from India or China, to cover margins at home, this causes a sharp drop that is not related to expectations of profit or loss. Malaysia has restructured its investment climate in ways that it expects will insulate it from the effects of large withdrawls of cash from their market. It appears to have worked the first time out.
2. To me anger will build in Russia and China as their new found wealth is tampered with. Since the US is the worlds punching bag.. it would not surprise me that an economic collapse would see the US being nuked back to the stone-age. India is probably smart enough to muddle through in hopes of better times ahead. Does this help any?