I took my kids on a cruise of the eastern Mediterranean last summer and one of the stops was Athens.  It was wonderful and little did I know at the time that that tiny country could have such as impact on all of us just a year later.

As I write this, the stock market is tumbling on worries that the Greek Debt Crisis could have a big impact on us.  How could that be possible, as most of our states have larger economies than Greece?  For two reasons; first they are part of the Euro zone and if this problem spreads throughout Europe we are going to lose a lot of buyers for our goods and services.  The data from Europe so far is not encouraging and this could make it worse.  Secondly, there is only so much money out there to buy things like government bonds.  Our own federal government is selling bonds like crazy to cover our expenditures.  Did you know that right now, every tax dollar the feds collect goes to entitlement programs and the rest of the budget including the military, education, energy, agriculture, and well, all the rest is paid for with borrowed money?

It's true!

And our states, being as big as they are economically speaking, are mostly in terrible shape financially and are having to borrow a ton of money just to stay afloat.  They are counting on an economic revival but if it does not come or is not strong enough, then they will be competing (the federal and state governments) with Greece and every other debtor nation for buyers for our bonds.  It will become harder and harder as the perceived risk to potential buyers becomes worse and worse.  It is ugly.

What this means to you is to build as much cash as possible right now to the point of putting off significantly paying off your debt.  Cash is the number one priority right now and as you build it up, buy gold or gold stocks or funds with it as a hedge for the inevitable inflation that is right around the corner.