(Editor’s note: Jim’s “Mid-Year Planning” series will continue next week.  Today’s post was published today due to it’s timeliness.)

I have started this post three times, and each time found it outdated by the time I completed it. The tragic loss of life in the Athenian riots was particularly troubling.

Why is this happening, what does it mean, and what could it mean to me and you?

The toughest part of writing about an event like this is that there is little in the way of historical precedent to use as a guide. The markets hate uncertainty more than they hate bad news. That’s why you see such dramatic moves in the markets; nobody really knows what will happen next.

Greece is in trouble. The government of Greece is much more involved in the day-to-day financing of their citizen’s lifestyle than you see here in the states. Unfortunately, the government has been borrowing to make these expenditures for some time now and they simply can’t make the payments on the debt anymore. The government cutting back on these services while raising taxes sounds painful to most normal folks. In the old days a nation facing this problem would just print more money to pay back the loans. Sure, it would lead to hyper-inflation within the country, but that would resolve without hurting too much (except for the citizens of that country). Greece can’t do that. When they joined the European Union they gave up the option to devalue their own currency. Some sort of default is in the cards.

So what sort of “bad stuff” could happen? If the IMF and the other EU nations step up for a bailout they will postpone the eventual default, maybe long enough for austerity measures to begin to turn the situation around. If it happens sooner it will likely spread to other nations in similar but less severe situations (Spain & Portugal, in particular).

The best case scenario is that the problems are contained within Greece, who will suffer through a multi-year depression.

How will this impact you and me? A depression in Greece will have very little impact, and our economy will keep percolating along. A depression in Greece, Spain, Portugal, Italy, and Ireland, along with recessions in Germany, France, Japan, and the UK, would tip us into a recession. That would be unpleasant, but survivable. On the plus side, the drop in demand for oil combined with the increased demand for the dollar that would accompany the end of the Euro will likely push gas prices down dramatically. See, there’s always an upside. It will be cheaper to drive to the job you won’t have.

Nobody really knows what the result of this debacle will be. The one truth is that “This too shall pass.” Soon enough the world will find something else to panic about. Just stick to the basics and hold on.

Jim Heitman, CPF Jim Heitman, CFP®, is a writer, speaker, and Certified Financial Planning practitioner in Southern California.