Ground Zero for the Next Disaster

Robert Kiyosaki wrote in his latest article "Think the Gulf Spill Is Bad? Wait Until the Next Disaster":

While in London, I decided to go to dinner at London’s Canary Wharf, ground zero for the next BP. Only a few years ago, Canary Wharf was one of the centers of the financial universe. Condo prices were sky high, offices were packed, and high-paid bankers filled Canary Wharf with wealth and excitement. Today Canary Wharf seems to be dying. It has lost its vibrancy. Many restaurants and offices were nearly empty and there were few lights to be seen in those once high-priced condos.

Canary Wharf will be the next BP, and its BP stands for Bomb Production. Canary Wharf is much like AIG, a factory for exotic financial products known as derivatives. The problem is that most people do not know what these murky and mysterious products are -- and that includes the people who make or buy them. It’s why Warren Buffett has called derivatives “weapons of mass financial destruction.” That is how powerful they are.

Back in 1966, when I was a student training to be a ship’s officer, my ship carried bombs from California to Vietnam. During World War II, a ship exploded while loading bombs at Port Chicago, California, the port where the bombs were loaded onto ships. The explosion flattened everything for miles. It is said that the ship’s anchor, which weighed tons, was found more than 60 miles away. Derivatives -- financial bombs -- have the same power if they accidently detonate inside a bank’s balance sheet.