If you haven’t been following the deteriorating debt situation in Europe, then these headlines pretty much say it all.

“Stocks Slide as European Crisis Grows”
“Euro Debt Fears Pummel Wall Street”
“Greece Default Risk Jumps to 98%”

#-ad_banner-#How can a small seafaring nation such as Greece cause so many problems? The week of Sept. 19 saw the worst finish for the S&P 500 since the bear market of 2008-2009, with the market closing down -6.5% on the week. At first glance, this seems strange given how few U.S. investors own any Greek stocks or bonds.

Well, few of us held shares of Lehman Brothers too, but that didn’t stop the fallout from its collapse from ravaging portfolios in 2008.

And while the sell-off after Lehman’s collapse ultimately turned into a buying opportunity, it is still just as difficult for many investors to know what they should do now, especially when they aren’t sure why the market is spooked anyway.

It all stems from the fact that earlier this month, the Greek government was forced to admit its debt-reducing measures haven’t done much good. In fact, with a deep recession choking off revenue, this year’s budget deficit has actually widened 22% to $24.8 billion in comparison with last year.

Having failed to meet the measures of their austerity package, Greece’s frustrated European neighbors are growing increasingly wary of throwing money down the drain.

Without the next scheduled installment of bailout cash, Greece could run out of money as soon as mid-October.

But the imminent threat of insolvency isn’t really what has investors worried. Rather, it’s the possibility that this debt issue spreads to larger economies.

Greece owes about $340 billion to European creditors. Large banks in France and Germany are particularly vulnerable and could be on the hook for huge losses.

Should one or more of these banks fail as a result, then others that have lent money to those institutions will in turn start to sweat.

European financial ministers are furiously scrambling to reach a solution. But the idea of complex lending mechanisms that have been suggested aren’t the answer; they just shift debt around from one European nation to the other to buy time. The issuance of a common euro bond is also unappealing, because it removes any incentive for weaker countries to become more disciplined (why bother if they can use their neighbors’ credit score?).

Sadly, it has taken a crisis to reveal the inherent challenge of having 17 members co-sign the same loan. If one refuses to make the minimum payments, then the others will be stuck with the bill. Sooner or later, Germany will have no choice but to cut the cord.

Of course, as an investor, simply rehashing the past news doesn’t do much good. It’s more important to us to know what’s next. Well, just like the sell-off we saw with Lehman’s fall, I think the angst over Greece has created some attractive values… especially in the natural resources sector that I specialize in for Scarcity & Real Wealth.

Take the oil/gas sector, for example. On Friday, Sept. 23, crude oil closed below $80 a barrel for the first time this year. On fears of Greece’s default, the euro has slumped to a seven-month low against the dollar, creating a headwind for commodities (which often trade inversely to the dollar).

But though Europe’s economic woes may lead to a modest retraction in energy consumption, the real incremental demand was coming from emerging markets — and the story there is still intact.

Just take a look at the graph of expectations for future energy use:

According to the Energy Information Administration (EIA), China and India will more than double their combined energy demand by 2035. This means roughly half of the world’s energy growth will be probably coming from these two countries alone.

So despite the short-term economic outlook, the long-term trend looks the same. Simply put, rapidly-expanding economies of countries like China and India are going to need more energy. And though oil stocks may have recently sold off, it’s reasonable to believe they will return to an uptrend once the economy shows some signs of life.

That being said, now may be a good time to pick up an energy stock like Brigham Exploration (Nasdaq: BEXP). Brigham Exploration is a pure-play company with a meaningful stake in the Bakken Shale formation in North Dakota.

With no less than 782 distinct well locations within its core territory, the company has only tapped 7% of its long-term prospective. And with the fundamentals for long-term energy demand growth in place, BEXP has a high upside potential… yet the shares now trade at $26 versus $34 back in July.

Action to Take — > There’s no doubt we’re not done with the Greece story. This means the road ahead will still be bumpy, with swings higher and lower — even for sectors like energy that still have a bullish long-term story. So expect volatility in the weeks and months ahead.

But in this chaotic market it’s important to remember: Keep your eye on the headlines — but don’t lose sight of the bigger story.

P.S. — Despite the recent financial panic, commodities across the board are still in short supply. In fact, I recently put together this free webcast highlighting some of the biggest supply/demand crunches on the planet. To find out what they are, and learn how you can profit from them, visit this link.