[Begin VIDEO with Kristin Arnold, Bankrate.com anchor introducing the video topic]
Kristin Arnold: Debt issues in Europe continue to dominate the headlines. While these problems stem from countries an ocean away, they can have a very real impact on American consumers. To walk us through some of the consumer impact, we're joined by Greg McBride, senior financial analyst with Bankrate.com.
[Cut to a double screen of Kristin Arnold and Greg McBride]
Kristin: We live in a global economy, so how do American consumers feel the economic impact?
Greg: The European union accounts for nearly 20 percent of U.S. exports, so a slow down on the other side of the Atlantic and the accompanying strengthening of the U.S. dollar puts a dent in U.S. exports ... that's a drag on the U.S. economy. That being said, a recession in Europe doesn't necessarily mean that the same fate awaits us here in the U.S.
Kristin: What is the downside risk to American consumers?
Greg: If things go really wrong ... if there's a sudden default or a sharp spike in the odds of a default among somebody like Italy or Spain then that could produce a global credit crunch. As we saw in 2008, that's something that could quickly hit U.S. consumers through higher unemployment, plunging retirement account values, sudden spike in some interest rates as well. While that's a possible scenario, and it's certainly a worst case scenario, it's not one that I'd say is overly likely at this point.
Tag: To keep track of interest rates, exchange rates or financial markets, just go to Bankrate.com. I'm Kristin Arnold.