US Recession. Not if, but for how long

I believe the US is heading for a recession. What's the global effect going to be, especially since the housing & credit bubble is a global phenomenon? The thing that most concerns me personally is most of my employer's revenue is in $US.

Recommended reading

A loan that'll get ugly fast. (Great article, comments here)

Every day, Will Hertzberg owns a little less of his three-bedroom house in Corona.

Interview with Paul Kasriel. (Inflation vs. prices)

If the current housing recession were to turn into a housing depression, leading to massive mortgage defaults, it could end. Alternatively, if there were a run on the dollar in the foreign exchange market, price inflation could spike up and the Fed would have no choice but to raise interest rates aggressively. Given the record leverage in the U.S. economy, the rise in interest rates would prompt large scale bankruptcies. These are the two "checkmate" scenarios that come to mind.

Buck & Housing Three Bears: Ripples, Momentum, Feedback. (A bit long, summary here)

The biggest housing bull market (12 years since 1993) will be followed by the greatest housing bear market in the modern era.

PIMCO's Gross: Rate cuts coming. (CNN Money interview with the Bond King, Bill Gross)

Once people start to believe that the Fed will have to cut interest rates in the next three to four months, the dollar's decline is going to accelerate.

It could be another one to two years before the effects of the housing bubble are unwound

And somewhat related: 10 reasons people make stupid decisions

10. We’ve come this far… (sunk cost bias) - We all know that the past is past and we can’t get back money or time that we already spent. But many people irrationally take sunk costs, time, money, or other resources which have already been spent and can't be recovered, into their decision making. Barry Schwartz from Swarthmore College, author of The Paradox of Choice, in an LA Times op-ed piece highlights examples of sunk costs used in decision making, such as how much you spent to get your car fixed last time, how long you have been dating someone, how much you invested in a stock, or how many troops have been lost in Iraq so far.