This is why people are worried—and are right to be so. That said, other countries have handled and are handling this. So, the idea that somehow this presages the end is simply silly. We should not make more of this than it is. The likelihood is that, once again, Germany will find its way to consensus.
Also helping matters is that the European and German economies continue to strengthen. If you are going to have a political crisis, it helps a lot if you don’t have to worry about the economy—and Germany does not. This also will help bring consensus back, as the ability of the different parties to cut deals will be much easier in a growing economy.
Is This A Crisis?
No, we are well away from a crisis. Could it become one? Yes, it could. But before then, we would have multiple indications that things were getting worse and would have time to react.
So, while this is something to watch, it is not something to worry about. It may become that, but probably not. If it does? We will have plenty of warning.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by Brad McMillan. Forward-looking statements are based on our reasonable expectations and are not guaranteed. Diversification does not assure a profit or protect against loss in declining markets. There is no guarantee that any objective or goal will be achieved. All indices are unmanaged and investors cannot actually invest directly into an index. Unlike investments, indices do not incur management fees, charges, or expenses. Past performance is not indicative of future results.