The world is in chaos and the global financial system is on the brink of a meltdown. But before you give in to the temptation to sell everything in your personal portfolio, sit back, take stock and try to look at the bigger picture. It might not be as bad as you think.
Financial panic has set in, so what now?
It could hardly get worse. Panic has gripped global stock markets. The United States has lost its AAA credit rating for the first time. The European single currency is in danger of collapse. London is in chaos.
The West has run up debts it can't afford to repay, forcing the global financial system to the brink of meltdown. Panic is setting in. It is like the 2008 credit crunch all over again, but with a cruel twist.
Three years ago, politicians and central bankers had plenty of fiscal and monetary ammunition at their disposal. They could slash interest rates, cut taxes, boost spending, bail out banks and print money. It was expensive, but it saved the day.
They can't do it now. The stimulus is spent, and all it bought was a brief reprieve and bags more debt.
Central bankers could still print more virtual cash, but the last time the US Federal Reserve did that, in its second bout of quantitative easing last November, it arguably did more harm than good.
QE2, as it was dubbed, ramped up oil and food prices, fuelled inflation in China and other emerging markets and fired revolutions all over North Africa and the Middle East. QE3 isn't exactly a risk-free strategy.
All that leaves is austerity, which will only make the problem worse, by crushing the growth the West urgently needs to repay its debts.
Even the emerging Chinese giant can't save the world. Like India, Russia and Brazil, it has been desperately trying to fight off inflation and cool its overheating economy. And it has debt worries of its own. Not to mention a property bubble.
Perhaps the panic has been overdone, but it looks like all the problems we postponed three years ago have returned, and with a vengeance.
You will have seen the effect on your own investments. If you hold stocks and shares, either directly or through a mutual fund, you will be a lot worse off than a week or two ago. So what should you be doing about it?
Whatever you do, don't panic, says Danielle Smith, area manager at international financial consultancy group PIC in the Middle East. "Yes, things look negative, but let's put it in context. Only one out of the big three rating agencies, S&P, has downgraded US debt. Moody's followed by quickly affirming its rating. Despite the eurozone's problems, it still boasts a host of successful, profitable global companies. Many investors will see the current downturn as an opportunity to buy stocks at today's lower prices, rather than sell."
How you respond partly depends on your personal circumstances and the type of investments you hold.
If you have savings and investments that you plan to hold for the long term, there is little you can do but hang on and wait for markets to recover.
If you are making regular monthly payments into a long-term savings plan, you might even benefit from the current volatility, Smith says.
That's down to a piece of technical jargon called dollar-cost averaging. If you invest a regular amount over a long period, you actually benefit if share prices fall, as you will pick up more units or shares for your money each month. Provided, that is, stock markets recover by the time you cash in your investment.
Unfortunately, that could take time. It has been a desperate decade for stock markets, and a full-blooded recovery is still a long way off.
On December 31, 1999, the benchmark FTSE 100 hit an all-time high of 6670, and the Dow Jones peaked at 11,497.
At time of writing, the FTSE stood at just 5105 and the Dow at 10,810 (they may be much, much lower by the time you read this).
Cash and gold are the only safe havens now, says Jeremy Batstone-Carr, head of private client research at stockbrokers Charles Stanley. "If you have cash, hold onto it. That way your money is safe. Nobody knows when the bottom of the market will come, but keep your ammunition dry, because there could be some bargains at some point, if you get your timing right."
Normally, the sharp market falls seen recently would attract investors, hoping to carry out a bit of bottom fishing, picking up good companies at panic prices. This hasn't happened yet, possibly because the bottom still looks a long way off.
Mr Batstone-Carr's second tip is to keep buying gold, even as the price rises above US$1,700 (Dh6,244) an ounce. "The high gold price reflects a lack of faith in global currencies such as the dollar, euro and sterling. Buying gold will protect you against further currency debasement and financial uncertainty."
If you still want to invest in stocks and shares, he recommends you stick to "defensive" stocks such as pharmaceuticals, telecoms, utilities and food companies, which typically perform better in a downtown. "Look for high-quality companies with robust balance sheets and strong, growing dividends."
Another big worry is what will happen to inflation. In the short term, price rises are likely to slow as growth slows. Oil has already dropped sharply.
But this may only be a temporary reprieve, Mr Batstone-Carr says. "Western governments will be tempted to inflate their debts away, perhaps starting with another bout of quantitative easing. Global interest rates are also likely to be held at today's lows for much longer, which will also fuel inflation."
That is bad news for savers, who have seen record low interest rates slash the value of their money in real terms.
Mr Batstone-Carr recommends investing in index-linked gilts or savings plans, which should keep pace with inflation. "Make sure you buy for the long term, because it could take a couple of years for inflation to really take off," he adds.
Asian stock markets have also plunged as panic spreads from trading floors in the West, but analysts claim the region's long-term growth potential is far greater than the West.
Asia won't escape western contagion, but its strong domestic fundamentals such as robust demand, low debt levels and high savings rates, not to mention a healthy banking system, should keep it healthier than the sickly West.
Recent sharp falls could be a great buying opportunity for investors who plan to hold for the long-term, says John Ford, Asia Pacific chief investment officer at Fidelity International. "Asian stock valuations were already at multiyear lows and have become cheaper still. Many stocks now look attractive on any valuation measure, even if growth will be slower as developed economies tighten their fiscal belts."
Falling oil, food and other commodity prices should help Asia by curbing emerging market inflation. "Chinese inflation should establish a clear downward trend over the coming months which will allow the authorities to relax their current tight policy stance," says Mr Ford.
When the dust settles, the transfer of wealth from West to East looks set to continue. You might want to invest in that.
So where does the crisis end? Nobody knows. "If central bankers in the US and Europe finally take aggressive action to get ahead of events, markets might finally get some breathing space. But it's a big if," says James Thomas, regional director at Acuna Wealth Management in Dubai.
He says you should resist the temptation to sell up now. "In volatile times, you can never be sure you are getting out at the right moment. And when the bounce back happens, which it will, you will miss it. This is often where the largest gains are seen."
For most of us, there is little we can do apart from watch with grim fascination as global stock markets panic and fall. You just have to tell yourself that it won't last forever.