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Paul in $ Financial Freedom Chasers,

What Greece's crisis means in simple terms and how it affects others

Unless you live in a koopa shell, you would have undoubtedly have heard about this crisis that went on in Greece.

Basically, they were not collecting enough taxes and were expending too much money on services and welfare as well as other needs, and now they are unable to pay back their loans. Yikes! This means that they will likely not be using the Euro too much longer.

They have other options, such as generating their own local currency, which will be weak!

However, this is a good news for many tourists since now it will be an attractive location to visit for the cheap cheap hotels, food, and services due to their weak currency. From tourists visiting their country, they will slowly recover economically and get back into the game.

In the near term however, I must say that Greece looks like it has a bleak future. The Europeon officials basically told them that their plea to extend their time to negotiate a reform is not accepted. So their deposits are continuing to be drained. Did you know that their citizens are limited to withdrawing just around 50 Euros a day? If you have your life savings saved in their banks, you can basically kiss all that good bye for a while.

So how does this affect U.S. stock prices and other things? Well, for one, some companies have invested in the Greece economy. So that's why you saw the 2% tank yesterday in the US market. However, all hope is not lost, after a major crash, things usually rebound over time. Personally I don't expect this to happen any time soon. We'll be seeing a lot of volatility over the next couple of days.

What does this mean for you? Avoid making any drastic buying or selling moves for a while... since many markets are affected by this crises. I mean, look at European markets, they tanked 4%. Ouch.