By Kurt Soller (Esquire)

With the world panicked after today's drop below 10,000 on the Dow, we called Michael Pento, the chief economist of Delta Global Advisors, to find out how a country like Greece — of all places, even after the month it had — could send us all scrambling like it did on Thursday. At least for a couple hours.

ESQUIRE: What the hell happened today?
Michael Pento: Greece. [When their debt was downgraded], the belief was they didn't have enough revenue to pay back German banks and the International Monetary Fund, to which the U.S. belongs. To pay its bills, Greece would have to cut back spending dramatically, and that's not something their population supports. So, then, the problem is that the holders of Greek debt — German banks, Spanish banks, Portuguese banks — won't ever get paid back, which will affect all of Europe. Since the DOW is up 80 percent since March of 2009, people are already nervous. They have their finger on the trigger, and this made them pull it.

ESQ: But... Greece. It's so small.
MP: There's an even more basic problem: chances are extremely high that the problems over in Greece will metastasize and land over on our shores, where we also have a huge deficit. Greek forebodes what is feared here in the U.S. And it doesn't matter that it is Greece, because it's actually all of Europe: If German and Spanish banks can't get paid back, they'll have to bailed out by the public sector — the Government — and that's going to send debt even higher. Then interest rates blow out, and what's happening in Europe hits everyone. Plus, in our own credit crisis last year, the decoupling theory was disproved: People thought the U.S. credit crisis wasn't going to affect the BRICs — Brazil, Russia, India, and China — and it did. What happens in one country's economy affects us all.

ESQ: How can regular folks make money off a stock plunge?
MP: Put a significant percentage of your portfolio in precious metals, especially, gold, which is soaring in value [as debt increases]. Of course, people need to diversify their portfolios, to make sure that all of their investments aren't U.S. They should be looking to China, Japan, and Europe — but spread it out. And the third thing they should do, and this is sophisticated: they should short the long end of the treasury curve. Once this crisis dies down, it will come over here, and people won't be loading their investments into our dollar — what was once thought as safe. The problems over in Europe will hit our dollar, and there will become a time when investing in that is the exact wrong thing to do. So you have to be ready.

ESQ: Say I don't listen, and I only have a buck left. Then what?
MP: Well, if you only had one dollar left, you wouldn't be a good investor. I'd convert it to gold.