My guess, and it's as good as yours, is that a US housing crash will dramatically affect US consumption through cutting off new "equity release", and therefore reduce the trade deficit.

However, the US government will continue to fund this deficit by selling bonds to the Chinese etc etc

It's the effects within the US that are interesting in terms of defaults and the ability of the financial system to cope.

If and when the international community then get the jitters re the US and the dollar, the Fed will be between a rock and a hard place, since raising rates to support the dollar would only intensify the problem.

But this is what you get when you allow the banking system to create Money as interest-bearing credit....

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky