Posted at 9:38 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

BREXIT!  I have to admit, I did not believe it would happen.  Rather, I did not believe it would be “allowed” to happen.  In retrospect I believe the elites will look back and wish they had “Diebold” doing the vote count.  This vote has so many various ramifications, it is hard to wrap your head around what it means but let’s take a look at what stands out most.

First and foremost, the “people stood up and spoke”.  The vote to exit is without a doubt the largest protest vote the world has seen in many years.  It is important to note that the Brexit vote is symptomatic of what is happening worldwide.  I would also say it is very similar to the Trump phenomenon here in the States, people are angry.  (I would also say the results are very encouraging to the Trump camp).  Next, we must wonder “who” is next?  Italy, Spain, France?  Then, the next exit is the curtain for the EU experiment as a whole.  It is only a matter of time before the next referendum (Italy in October), Brexit is only the beginning of an end where individual countries will prefer to steer their own destinies.  “Globalization” has been dealt a huge blow!

It should be noted, the vote yesterday was only a referendum and does not guarantee the Parliament will petition to leave the Eurozone.  It will be interesting to see how the Brits react if Parliament defies their wishes.  All of this will take “time” to occur, but time is not something I believe is available and will most likely be cut short by the markets short circuiting.

As for markets, Brexit is being called a six sigma “Black Swan”.  I had planned to write today that the entire system itself is the fabled Black Swan, I think we will soon see if this thought is correct.  The world will wake up Monday morning to all sorts of margin calls.  You must understand, the “carry trade” is held on very thin margin.  No matter what market you are looking at, they all moved several percentage points versus 1% or much less used to carry positions.  My point is this, many “counterparties” were outright blown up today and are dead entities unable to perform.  Yes I am sure the Fed, ECB and BOJ will provide liquidity but that will not erase the losses, it will only postpone the pronouncement of death.

I believe it is VERY important to look at the “direction” that all markets have taken since the Brexit news.  THIS is the direction of Mother Nature versus the direction of the elite controllers.  You can call the moves “out of control” if you wish, the important thing to understand is the control of markets was temporarily lost and went in “bad” directions.  These “bad” directions are your road map as to which direction various assets will move in the upcoming re set.  I say the above with one caveat, capital flowed into U.S. Treasuries and German bunds, a reset will not be kind to the owners of debt from any issuer.

To finish, clearly today’s unanimous winner in ALL currencies was gold.  As I wrote above, I believe the action today is your road map and a “tell” as to where we are headed.  Financially, the system blew up behind the scenes and we will soon hear “who, where and how much”.   We have gone nearly eight years with “unlimited paper” pushing, pulling and “pricing” markets in directions that supported the Alice in Wonderland world.  The knee jerk reactions you saw today will only become more violent as today was only for starters.  The only question remains, how long can they keep markets open?  The carry trade unwind can only go so far without control being totally lost.  Central banks will be mere straws in a hurricane of fear.  A complete re set of “pricing” is not far off!

This is a public article.  If you would like to read and hear all of our work, please follow this link to subscribe https://www.jsmineset.com/membership-account/membership-levels/

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome bholter@hotmail.com

Posted at 9:47 AM (CST) by & filed under General Editorial.

Notes From Underground: The Answer to Brexit is 23 Skidoo
Yra Harris

In the early days of the 20th century there was a colloquialism: 23 Skidoo. Wikipedia’s definition: A slang American term popularized during the early parts of the last century. It generally refers to leaving quickly, being forced to leave quickly by someone else, or taking advantage of a propitious opportunity to leave, that is, “getting out while the getting’s good.” If I was a British voter I would adhere to the wonderful thought of the Spectator article published last week (h/t OB).

The fear-mongering from the globe’s self-selected elite is predicated on concerns about the potential for large financial losses from the entire European project to be cast asunder as many other EU nations seek to depart from the “shared responsibility” of a grand vision of the Davos elite. The Brits need to blow up the EU to save it from itself. If Britain votes to stay, the average U.K. citizen will find herself trapped in the EURO and wind up a major creditor to the debt the ECB is accumulating. The fear of Britain being left out of world trade is a bogeyman with no substance.

The G-7 recently admonished the Brits for having the “audacity” to seek out its own trade deals with China rather than being a servant of the demands of the U.S. and its subordinates. Read the Spectator piece and form your own opinions about the June 23 vote. For me it’s skidoo.

***Today, Janet Yellen offered no surprises in her testimony to the U.S. Senate. There was a good discussion about Brexit and, even more importantly, an appropriate questioning on the importance of the Labor Market Condition Index. Chair Yellen explained that the significance of the LMCI provides a glimpse at the rate of change in a variety of variables. Currently the rate of change is deteriorating, which is making the Fed cautious about the employment picture. Still, the Fed chair spent more time answering questions about diversity in the Fed appointments.

Senator Shelby tried to pin down the Fed Chair on the centeral bank’s exit strategy from its massive balance sheet expansion but Ms. Yellen dodged that issue as she so adroitly did Steve Liesman question at the Fed press conference. It all comes down to the market response to the Brexit vote. Until then, skidoo from position risk. Trade with fervor, invest with fear.

Posted at 9:43 AM (CST) by & filed under General Editorial.

My Dear Friends,

The entire financial world is a cartoon drawn by can kickers who are called experts. The thieves of our future should be rounded up and made permanent parties on “Naked and Afraid.” Clearly they are scared to death as to what is contained here. Their actions are so transparent they are naked. The visual of this is really awful. Worst is what they do knowing their short term actions, will without any doubt, bring on the long term return to the New Normal Dark Ages. These experts and self-proclaimed elites are truly the Four Horsemen of the End of Days Economic. From MOPE to QE to EDE and the end.

If I was young or a strong 75, I would get out of here while I still could going to the best location of nobody in the middle of nowhere. Watch the documentary “Last Alaskans” to see the lifestyle of the survivors and their families. For that life you have to be young or have the strength of an ox. Preppers know the problem but Preppers will all run out of their carefully selected but limited preparations. The elite are fairy like fops, all of them. The old European families are so bad there is no description. They only mingled with their own kind or people so they are more inbred than the aboriginal.

These manic liberals, one world government and 1% have killed us all, including themselves. I wish I had an easy solution but there is none. You must be self-sufficient among self-sufficient others in the most rural of areas. Now who can do that?

There is one sign of hope. That is Heimo in this documentary. He is the northern most Jew on the planet, and thus the TV name, Heimo North. If Heimo can do it and be so happy, there is a chance, but not in Manhattan or Los Angeles.

Heimo may never know it happened or care. So who wins, Heimo or the 1%, Kim Kardashian, or Edna North?

Respectfully yours,
Jim

Day of Reckoning for Banks in Italy, Spain, & Portugal Kicked Down the Road (Elegantly) for 18 Months

Past a possibly messy Brexit & elections in France and Germany
By Don Quijones, Spain & Mexico, editor at WOLF STREET.

Senior bankers in Spain and Italy can breathe a collective sigh of relief after Europe’s finance and economic ministers decided on Friday to postpone, for at least 18 months, a decision on setting a limit on the government bonds some banks can hold as eligible “risk-free” capital. It was one of four things keeping Spanish senior bankers awake at night. Now, they can sleep a little sounder.

The initiative, initially proposed by the German government and supported by other fiscally hawkish governments such as Finland and the Netherlands, was intended to limit the purchase of public debt by banks, in order to break the vicious cycle of co-dependence that now exists between sovereign and bank risk.

If allowed to happen, the move could have posed a very serious threat to the balance sheets of many banks on the Eurozone periphery. According to European Central Bank data, euro-area sovereign bonds accounted for over 10% of banks’ assets in the Eurozone, or €2.73 trillion ($3 trillion), at the end of 2015 — over €300 billion more than at the end of 2014, on the eve of the ECB’s launch of its negative interest rate policy (NIRP).

This trend is particularly acute in countries like Portugal, Spain, and Italy, where banks’ balance sheets are filled to the gills with bonds of their individual sovereigns — all considered “risk free” for regulatory reporting. Just the merest suggestion of loosening the chains of interdependence between sovereigns and banks was enough to set off shrieks of panic in the halls of government and banking C-suites of Madrid, Rome, and Lisbon.

“Let’s be very careful about translating into practice rules that look nice on paper,” Italian Finance Minister Pier Carlo Padoan warned, adding that any such rules could lead to a sell-off and “instability”. Padoan’s sentiments were echoed by Santiago Fernandez de Liz, the chief economist for financial systems and regulation at Spain’s second biggest lender, BBVA, who cautioned that applying a proposal of this kind in the Eurozone would “reignite the fragmentation” of Europe’s financial markets.

The threats appear to have worked, prompting Ecofin to announce that it would first wait for the findings of the Basil Committee, to be held in 2017, before reaching any definitive decision regarding the regulatory treatment of sovereign debt. None of this should come as a surprise, with the Fed, the Bank of Japan, and the Bank of England all vehemently opposed to Germany’s proposal.

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Posted at 12:22 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Look when the record was set. Sign of things to come?

Palm Springs breaks heat record, hitting 121 degrees
Los Angeles Times | June 20, 2016 | 2:03 PM

Every so often someone walks into the Palm Springs Visitors Center raring to burn through hiking trails like they’re British adventurer and TV personality Bear Grylls.

For those people, Ceej Juarez, who provides information about hiking trails in the Agua Caliente Indian reservation, has to be a voice of reason.  And that is never as important a job as it was on Monday, when a torrid heat wave sent temperatures to 122 degrees in the resort city by early afternoon.

The temperature broke the former record for the date of 118 degrees in 1929, according to the National Weather Service. Other cities that hit new highs for the day included Riverside (113), Indio (120), Escondido (106) and Thermal (119).

“People die out here every year,” Juarez said. “First thing I tell them is that they must carry lots and lots of water. You need at least a quart per mile.”

Earlier in the morning, she said, a family wanted to drive to Las Vegas and take a scenic route through Joshua Tree National Park and then through the Mojave Desert.

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Bill Holter’s Commentary

“$10 billion here, $10 billion there, pretty soon it will be real money” …actually not. The funds needed by the banking system have already been burned. No amount of new “debt money” can ever fix what has already been destroyed.

Internal watchdog document shows Nordea lacks capital: daily SvD

An internal document at Sweden’s financial watchdog shows Nordea (NDA.ST) underestimated risks in its corporate lending and could need as much as 80 billion Swedish crowns ($9.70 billion) in new capital, daily newspaper Svenska Dagbladet reported on Monday.

A spokesman at Nordea said the Nordic region’s biggest bank had more than fulfilled capital requirements in the financial watchdog’s latest assessment, delivered in March, and that this had occurred after the authority’s document was said to have been drafted.

Nordea spokesman Rodney Alfven said the bank would provide further comment on the report later. A spokesman at the financial watchdog declined to offer any immediate comment.

Svenska Dagbladet, citing sources with knowledge of the document, said it had been produced several months ago by an analyst at Sweden’s Financial Supervisory Authority and it warned that Nordea had underestimated risks in its corporate lending for an extended period.

Lower risks associated with lending, which are based on historic risk assessments, allow banks to hold less capital to account for these risks.

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Posted at 10:15 PM (CST) by & filed under In The News.

Dear Friends,

I would say that Switzerland just threw a huge long term Spanner into the Werks. Right now currency baskets means a lot to the elite and a very little to the serfs (citizens).

Switzerland withdraws longstanding application to join EU
Published time: 16 Jun, 2016 06:54Edited time: 16 Jun, 2016 06:55

The upper house of the Swiss parliament on Wednesday voted to invalidate its 1992 application to join the European Union, backing an earlier decision by the lower house. The vote comes just a week before Britain decides whether to leave the EU in a referendum.

Twenty-seven members of the upper house, the Council of States, voted to cancel Switzerland’s longstanding EU application, versus just 13 senators against. Two abstained.

In the aftermath of the vote, Switzerland will give formal notice to the EU to consider its application withdrawn, the country’s foreign minister, Didier Burkhalter, was quoted as saying by Neue Zürcher Zeitung.

The original motion was introduced by the conservative Swiss People’s Party MP, Lukas Reimann. It had already received overwhelming support from legislators in the lower house of parliament in March, with 126 National Council deputies voting in favor, and 46 against.

Thomas Minder, counsellor for the state of Schaffhausen and an active promoter of the concept of “Swissness,” said he was eager to “close the topic fast and painlessly” as only “a few lunatics” may want to join the EU now, he told the newspaper.

Hannes Germann, also representing Schaffhausen, highlighted the symbolic importance of the vote, comparing it to Iceland’s decision to drop its membership bid in 2015.

“Iceland had the courage and withdrew the application for membership, so no volcano erupted,” he said, jokingly.

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Jim Sinclair’s Commentary

Today from John Williams.

- Housing Starts Continued to Hold in Smoothed, Low-Level Stagnation, Never Having Recovered Pre-Recession Highs
- May 2016 Economic Detail Generally Was Bleak
- Unfolding Recession Should Become Increasingly Obvious in the Month Ahead; Recognition Should Follow the July 29th GDP Benchmark Revisions

“No. 815: May 2016 Housing Starts, Economic Review ”
PDF: http://www.shadowstats.com

 

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Bill Holter’s Commentary

I’m pretty sure you already knew this all along if you read John Williams’ work.

Obama Administration to Revise Total GDP Growth Down 2%
by Chriss W. Street16 Jun 2016

The Commerce Department is set this July to publish a stunning 2 percent downward revision of gross domestic product (GDP) during the Obama Administration term in office.

The Department’s Bureau of Economic Statistics (BEA) regularly makes small revisions to its published statistics as more information becomes available over time. But in a massively large adjustment, the BEA just revised downward — by $346 billion — the real (after-inflation) GDP for 50 states and the District of Columbia, covering the 11-year period from 2005 through the end of 2015.

According to BEA’s newest data, real GDP was overstated by about $125 billion from 2007 through 2008, during the period leading into the start of the Great Recession. But the overstatement shrank to about $70 billion in 2009.

During 2012 and 2013, when the U.S. economy had what some have referred to as a micro-recession, the overstatement of real GDP growth ballooned to about $275 billion. Despite over $100 billion in revisions to real GDP growth in 2014 and 2015, the overstatement continued to grow to $324 billion, or 2 percent of GDP.

The Obama Administration is already under fire for producing an average real GDP growth of just 1.55 percent for their its 7 years in office. That ranks the Obama presidency as the fourth from the bottom for the 43 Presidents of the United States, Obama’s performance ranks above only Herbert Hoover at -5.65 percent, Andrew Johnson at -0.70 percent and Theodore Roosevelt at 1.41 percent.

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Jim Sinclair’s Commentary

See, it can be done. Have you noticed there is a significant wall around the Vatican?

Israel Goes Full Trump on Gaza: Massive Concrete Wall Above And Below Ground Along Entire Border

TEL AVIV – As the debate over Donald Trump’s proposed wall along the U.S.-Mexico border continues to dominate the presidential race, Israel is reportedly planning to move ahead with a massive above and underground concrete barrier along the entire border with the Hamas-controlled Gaza Strip.

The barrier was revealed on Thursday in a story splashed across the cover of Yedioth Aharonot, Israel’s largest daily newspaper. The story was published with the approval of the country’s defense ministry.

Yedioth’s affiliated website, Ynetnews, has the details:

Israel’s defense establishment’s plan to build a concrete wall tens of meters underground as well as above ground along the Gaza Strip border was revealed by Yedioth Ahronoth Thursday morning. …

The wall will stretch along the 60 miles of the southern border around the Gaza Strip, and will in fact be the third defense system of its kind Israel has built along the border.

The first 60-kilometer barrier was constructed in 1994 following the Oslo accords, while the second system was built following the decision to disengage from Gaza in 2005. Neither of the efforts, however, provided comprehensive solutions to the threat of attack tunnels.

The report comes after two Hamas terror tunnels were discovered crossing into Israel in April and May.

As Israel confronts threats along its borders, Prime Minister Benjamin Netanyahu has made the construction of new barriers a major national security priority.

In February, Netanyahu announced he is working to surround the entire country with fences and barriers “to defend ourselves against wild beasts” that surround the Jewish state.

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Jim Sinclair’s Commentary

It is not what China will sell but what impact this will have on likeminded central banks both on the strange securities buys and over the top holdings in US Treasuries.

China dumping more than Treasuries as US stocks join fire sale

For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy.

The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows.

While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines.

The nation’s stash of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion, Treasury Department data show. That far outpaces selling by investors globally in that span — total foreign ownership fell just 9 percent. Meanwhile, China’s U.S. government-bond stockpile was relatively stable, dropping roughly $26 billion, or just 2 percent.

“China’s U.S. portfolio doesn’t just consist of Treasuries,” said Brad Setser, a senior fellow at Council on Foreign Relations in New York. “To gauge China’s activity in the market it’s increasingly important to look beyond the Treasury market.”

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Posted at 10:07 PM (CST) by & filed under Jim's Mailbox.

Larry/Bill,

Because Texas teachers wish to be the last teachers standing, are they thereby perpetuating the ability to open carry in class?

Jim

Why Does the Texas Teachers Retirement Fund Own Gold?

Whenever the topic of gold comes up it always seems like to me that there is way too much emotion about it. Mainstream analysts and financial advisers tend to react to gold as if it was the worst possible asset in the world for anyone to even think about owning. On the flip side, some gold advocates can’t understand why everyone doesn’t sell everything they have and put it all into gold.

Obviously, I’m exaggerating somewhat, but that’s what many people seem to do when gold is mentioned for whatever reasons. I think there is a more reasonable approach to the whole subject and the Texas Teachers Retirement System seems to “get it” to me. The June 2016 edition of Gold Investor published by The World Gold Council has a great interview with Shayne McGuire. He is portfolio manager of the Gold Fund for the Teacher Retirement System of Texas.

Mr. McGuire shows us how its possible to take an unemotional and rational view of how gold can be used to diversify a portfolio. He explains why the Texas Teacher Retirement System has done so. The article is in pdf form so I can’t directly link you to it.

However, below I pasted in the first two question and answers along with the last question and answer in the interview. You can read the full article by going to this link first. Then look for the pdf download link (see Download (pdf, 860.62 kb)) which will give you the full publication in pdf format. This article is on page 8 of the publication.

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Posted at 1:01 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares his latest with us.

- Deepening Recession
- Second-Quarter 2016 Industrial Production Continued to Sink, Quarter-to-Quarter and Year-to-Year
- Outside of Recession, a Third Consecutive Quarter of Annual Contraction Is Unprecedented in the 97-Year History of the Production Series
- Never Recovering Its Pre-Recession High, the Manufacturing Sector Was Down by 6.55% (-6.55%) from Its December 2007 Peak
- Having Had a One-Month Recovery in November 2014; Production Was Down by 2.94% (-2.94%) from Its “Recovery” Peak, and by 2.06% (-2.06%) from Its November 2007 Pre-Recession High
- Tentative Respite for the Mining Sector?
- May 2016 PPI Goods Inflation Rose by 0.66% Month-to-Month,PPI Services Profit Margins Rose by 0.18%, Leaving Aggregate Final-Demand PPI Inflation Up by 0.36%
- Year-to-Year PPI Final-Demand Inflation Fell by 0.09% (-0.09%)

“No. 813: May 2016 Industrial Production, Producer Price Index “
PDF: http://www.shadowstats.com?

 

Jim Sinclair’s Commentary

So could gold reach and exceed old highs?

US bond yields could soon go negative: Strategist
Alex Rosenberg | @AcesRose
Wednesday, 15 Jun 2016 | 7:16 AM ETCNBC.com

It’s an inevitable question: Could U.S. 10-year yields turn negative now that German 10-year yields have fallen below zero for the first time ever and Japanese 10-year yields have dipped to record lows of negative 0.17 percent?

According to Dennis Davitt, partner at Harvest Volatility Management and a noted options market veteran, it may well happen.

“I think you could see negative rates in the U.S. If Germany and other countries in the world go even further negative, it turns into a number line game. So where zero lies on the number line, who knows?” Davitt said Tuesday on CNBC’s “Trading Nation.”

He sees rates being driven lower by two factors in addition to overall slow global growth: Stimulative central bank policies and regulations.

“The European banks under their Basel regulations, much like our Dodd-Frank, are forced to hold a certain amount of assets on their balance sheet [and] those assets have to be government-issued debt. So they’re forced to own those assets.”

For that reason, no matter how low yields fall, “there’s a buyer in the marketplace,” he said.

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Posted at 4:13 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- Statistically-Insignificant, and Due Largely to Rising Inflation, May Nominal Retail Sales Gained 0.45%
- Inflation-Adjusted Real Retail Sales Likely Will Be Flat for the Month, with Real Annual Sales Growth Still Generating an Intense Recession Signal

“No. 812: May 2016 Nominal Retail Sales ”
PDF: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

Now exactly what is the long term plan to maintain the dollar as the key world currency? War? There is none is practical sense.

Enter the longest of long term planners, China and Russia. They are destined to inherit the future.

China’s yuan trade system to open branches in London, New York
Sun Jun 12, 2016 8:53pm IST

China’s state-owned currency marketplace said on Sunday it was preparing to open branches in London and New York as part of efforts to promote the yuan’s global status.

The China Foreign Exchange Trade System (CFETS), a subsidiary of China’s central bank, said in a statement that by expanding its network offshore, it aims to serve more overseas institutions and become a “main trading platform and pricing center” for the yuan globally.

China has been gradually loosening its capital controls to allow more foreign participation in its onshore yuan market. Beijing is also fostering offshore yuan centers to promote international use of the Chinese currency.

CFETS provides an electronic bidding system for the yuan against foreign currencies. It also offers cross-rate trading, as well as RMB interbank lending and bond trading. Yuan-based trading on CFETS totaled 618.12 trillion yuan ($94.24 trillion)in 2015, according to official Xinhua News Agency.

The CFETS said that it would further strengthen cooperation with overseas trading platforms, and aim to eventually provide trading services 24 hours a day, seven days a week.

The market platform extended its trading hours for China’s onshore yuan this year to end trading at 11:30 p.m. local time from 4:30 p.m. previously.

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Jim Sinclair’s Commentary

Could the trend be turning against the highway robbers? Are the elite now in the same situation as Main Street was in 2006? Could the explosion of the madness of negative interest rates whereby you pay for the privilege of buying a bankrupt sovereign turn out to be the bubble of the end of days? The answer is simply because it is YES! This creation of the nerds could really be the Zombie Sovereign State Financial Apocalypse with the four horsemen really be three horsemen and the Lady known as Chair and all central bankers. Could the biblical prediction have to do with the ugly excesses of the elite? Yes, it does.

Here is trend change evidence. It grows every day like the dislike for professional politicians and their masters.

SEC staff recommends approval of IEX, approval likely soon –WSJ
Chuck Mikolajczak

NEW YORK, June 14 (Reuters) – The U.S. Securities and Exchange Commission is preparing to act on a controversial request by new trading group IEX Group Inc to launch a new U.S. public stock exchange, and has received a recommendation from its staff that it approve the exchange, according to a Wall Street Journal report on Tuesday.

The proposed exchange from IEX, made famous by the Michael Lewis book “Flash Boys: A Wall Street Revolt,” is notable because it would be the only one in the United States to include a so-called “speed bump” – a 350 millionths-of-a-second delay in all incoming and outgoing orders.

According to IEX, that protects investors from high-frequency traders who can pick up on trading signals and use faster technology to electronically front-run slower investors.

Other exchanges, including Nasdaq, the New York Stock Exchange and BATS Global Markets have been vocal in their opposition to an IEX approval. Nasdaq has suggested any SEC approval could be challenged.

The SEC has a June 18 deadline to act on the proposal. An internal source told Reuters the commission wanted to see competition to the existing model of electronic trading and order execution, and was unlikely to miss that deadline.

The WSJ report said the commission was likely to vote on the order on Friday and to approve it. An SEC spokeswoman declined comment the commission would meet that day.

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Jim Sinclair’s Commentary

This is what gold loves.

German 10-year sovereign bond yields turn negative for first time
Saheli Roy Choudhury | Matt Clinch

The yield on the 10-year benchmark German bund fell into negative territory for the first time ever on Tuesday morning, amid global growth concerns and jitters over the U.K.’s upcoming referendum on its European Union membership.

At around 8.30 a.m. London time, the yield hit zero and briefly fell into negative territory as investors continued to flock to safe-haven assets. Bond prices and yields move in opposite directions and a negative yield implies that investors are effectively paying the German government for the privilege of parking their cash.

A spokesperson for the German Federal Debt Agency spoke immediately after the milestone was reached, stating that the tradability of federal securities is “still very high.”

“The federal debt-management strategy is long-term, therefore, the current absolute yield level plays only a subordinate role. Our target remains a sustainable balance between cost and planning security for the debt portfolio,” the agency said in an email to CNBC.

The move comes as the European Central Bank has ramped up its bond buying program in recent months as well as investor uncertainty over whether the U.K. will stay in the European Union.

The latter is sparking volatility across financial markets with a beneficiary of the tumult being government bonds. The latest trigger has been two new polls out of the U.K. which showed the Brexit camp is gaining momentum.

An ORB poll for the Telegraph showed 48 percent of Britons would vote to remain in the European Union, while 49 percent would vote to leave.

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Jim Sinclair’s Commentary

What is the message he carries that none want to hear?

After U.S. arrival, Saudi prince remains off White House schedule
John Hudson

It was billed by Riyadh’s state media as a trip for Saudi Arabia’s powerful deputy crown prince to meet with President Barack Obama and other senior U.S. officials. But now that Prince Mohammed bin Salman has arrived in Washington, it’s still unclear if the president or any White House officials will meet with him, a spokeswoman said Tuesday.

“No confirmation at this time for any WH meetings,” White House spokesperson Dew Tiantawach told Foreign Policy.

The absence of any scheduled meetings with even Vice President Joe Biden or National Security Adviser Susan Rice is fueling speculation among Gulf experts about a diplomatic snub. It comes amid sharp policy differences between Washington and Riyadh, and unease among U.S. officials about overplaying alliances with the 30-year-old prince, who some view as locked in a power struggle with the older Saudi Crown Prince Mohammed bin Nayef.

“Very unusual for the Saudis to come out saying he is meeting with Obama and White House not confirming it,” said David Ottaway, a Saudi expert at the Wilson Center in Washington. “They certainly knew he was coming.”

If the White House needed a diplomatic excuse to bail on the younger prince, who also holds the title of defense minister, it could easily and understandably claim to be more immediately focused on last weekend’s deadly shootings in Orlando, where Obama will travel Thursday to express support for the victims. But U.S. officials have remained mum about the scheduling standoff. “We’re not going to comment on conjecture,” said Tiantawach.

Prince Mohammed will meet with top State Department and Pentagon officials as he promotes plans to overhaul the Saudi economy, the world’s biggest oil exporter. He will also travel to California for meetings with Silicon Valley executives.

The Saudi royal court said in a statement that Prince Mohammed would seek ways of strengthening bilateral relations with Washington, which have taken a sharp downturn in recent years. Riyadh wants the Obama administration to more aggressively confront its archrival, Iran, for what Saudis describe as undermining its Arab neighbors.

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