“You have to take your time, walk slowly. Otherwise, you might as well not bother.”
Francois Debenest, recently retired after 40 years as a farmhand, was showing me a secret. We were out in the woods south of the house on Saturday morning looking for mushrooms.
What follows, I must warn you, is another rambling letter of no particular importance. It concerns, loosely, a subject I know is as big a concern to you as it is to me: “deracination”.
“I know only two kinds…well, maybe a few more,” said Francois, as we moved almost silently among the charme trees – which look like ironwood or beech. The ground was wet. The leaves, which lay on the forest floor were as limp and lifeless as a subway drunk.
“They’re very hard to see,” said Francois, motioning with his hand for me to slow down. You have to take your time.
“Do you see one?” he asked me a moment later. “It’s right in front of you.”
It may have been right in front of me, but I didn’t see it. The cepp mushroom has a brown top – about the same color as the leaves. It must be a form of camouflage – maybe against impatient mushroom hunters like your author.
The mushrooms don’t grow everywhere. In 40 years of looking for them, Francois and his brothers had found them only in this one little area of the forest. It looks no different from the rest of the woods…but go 20 yards in any direction, and you will find no mushrooms.
Francois has guarded the secret as a fisherman keeps his fishing holes to himself or a private investor keeps quiet about his best opportunities. The best investments – like the best places to find mushrooms – are rarely discussed.
Now that Francois is retired, and has left the farm, he is willing to tell me where to find the mushrooms…
Daily Reckoning reader, MM, sent me this quote from a 1930 G. K. Chesterton lecture entitled “Culture and the Coming Peril.”
The Coming Peril was:
“…the intellectual, educational, psychological, artistic overproduction, which equally with economic overproduction, threatened the well being of contemporary civilisation. People were inundated, blinded, deafened, and mentally paralysed by a flood of vulgar and tasteless externals, leaving them no time for leisure, thought, or creation from within themselves.”
Despite making this statement more than 20 years before Neumann filled a room with vacuum tubes, making way for the PC revolution, Chesterton could be describing the Internet. You may be able to buy mushrooms over the Internet – but you cannot hunt for them. Hunting for them takes a different kind of knowledge, and a different kind of attitude. It takes time.
As the division of labor expands, fewer and fewer people have the time or inclination to hunt for their own mushrooms. We are all deracinated, cut off from direct knowledge of the things that really matter to us. We don’t know what’s in the food we eat…nor how it is prepared. We don’t know who writes our software programs, nor do we have any idea how they actually do it. Mass investors don’t know what the companies they buy actually do, and have way of measuring the value of the stocks, except for recent price trends.
My son, Jules, plays computer games, reads books and watches movies all day long. He doesn’t even like to visit with friends – as they cut off the time he might spend with his virtual friends.
According to a report in the WSJ, hotels now earn more of their profits from the in-room naughty movies than from their bars and restaurants. This, too, must be a show a preference for the virtual, or perhaps vicarious, over the real thing. Not only that, it represents a triumph of mass thinking. We no longer have to discover the baroque particularities of sex for ourselves. It is right there – mass-produced, packaged and clarified on the Pay-for-View system.
People don’t know where the mushrooms grow – and don’t seem to care. You can get them in the grocery store.
Even wealth itself is more and more of the collective, virtual sort. An article in the International Herald Tribune informs me that 4 million people have already signed up for a service called PayPal, which allows people to transfer money via email. The system’s founder says he is handling $6 million per month in payments.
Wealth was once measured in useful, particular items – such as furs, weapons, slaves, cattle or land. Those items were replaced by gold, silver and other precious or rare commodities – such as the stones of Yap. Then, mass- produced paper replaced metal. Paper currency and paper checks, notes, bills, and various paper bonds and other obligations served to represent wealth.
And now wealth exists purely in digital form – nothing but long strands of 1’s and 0’s that convey the necessary information and have no tangible or individual embodiment of any sort. You cannot see it, touch it, feel it, eat it, weigh it or even use it to light a cigar. But it seems to do the job.
Is this deracinated wealth any less real, or less reliable, than analog wealth?
More to come…
Bill Bonner Ouzilly, France October 30, 2000
P.S. Francois is being forcibly deracinated – a victim of his age, French retirement laws, and his own cantankerous personality. He is, unfortunately, no longer welcome on the farm…and can no longer legally work here. All he can do is gather mushrooms. More about this too…
P.P.S. Chesteron was right. Vulgar, tasteless externals dominated life in the years following 1930s. And nowhere were the externals more vulgar and tasteless than in the politics of the mid-20th century.
Hitler complained that the Jews were “deracinated.” He meant they were cut off from the land – unlike the good German volk, many of whom were still up to their knees in the mud of Schwabia or Westphalia.
The Jews, by contrast, were urban…mobile…and bourgeois. They were not farmers. But they were not really deracinated. They were rooted in their towns and in the bourgeois traditions, impulses, and evolved rules of a successful culture.
It was this that really vexed the little corporal. The Jews were thoroughly rooted – by religion and tradition. It was the socialists who were deracinated. They had no time for the rules and sentiments of bourgeois culture… and no time for hunting mushrooms. They believed they had something better – national socialism: with which they would make a new world.
*** The Bureau of Labor Statistics reported on Friday that the nation’s GDP growth rate had slowed in the 3rd quarter. The key component, according to Bloomberg’s Caroline Baum, is “domestic demand” – which rose 7.5% (annual rate) in the first quarter, 4.7% in the second and fell to only 2.8% in the third.
*** Thus does the ‘miracle economy’ come to seem a bit more ordinary. Even with the wind of hedonics at its back, GDP in the 3rd quarter grew only at a 2.7% annual rate.
*** The source of the miracle was believed by some to be new technology. Others – curmudgeons, cranks, and Austrian economists – found a more familiar cause – new money. In the 13 years since Alan Greenspan has been Fed chief, Richard Russell observed over the weekend, he has increased the money supply by 3.25 Trillion dollars – more than all the other Fed chiefs, since 1913, combined.
*** Whatever the cause, the U.S. economy seems to be cooling off. The ‘soft landing’ that investors had hoped for seems to be getting close. We have our seat belts strapped on…and our tray tables stowed away…but we are not at all sure the landing is going to be as soft as predicted. This economy and stock market surprised everyone on the upside – perhaps it will be symmetrical on the downside.
*** Wall Street liked the GDP figures, which suggest that the days of Fed tightening are over. The Dow shot up 2% – or 209 points, to end the week with a 3% gain.
*** If this were still July or August, the financial press would be in full chortle about the rally expected for this week. Instead, the reports I read this morning were remarkably restrained. The four E’s worry investors – Earnings, Energy, the Economy and the Election. Times have changed. What was cause for celebration a few months ago is now a source of anxiety.
*** But as much as U.S. investors were encouraged by the slowing economy, foreign investors were unsettled. Much of the appeal of the dollar has been that it was backed by the U.S. miracle economy. Now, the U.S. economy seems to be growing no faster than the European one. Perhaps its money is not much more valuable either.
*** The euro gained about 1% on Friday. And the dollar index fell a point. It is surprising, to me anyway, that the dollar stood firm while the Nasdaq lost its footing. The dollar is not itself the source of the miracle economy…but it is the shroud on which the miraculous image appears. $1 billion per day come into the US from overseas to fund the current account deficit. When that stops the fabric will disintegrate and the miracle economy will disappear. Could Friday mark the beginning of the end?
*** About 20% of the dollar’s support over the past year came from a single source – European telecoms. The companies needed dollars to fund U.S. mergers and acquisitions. Another big part of it came from US companies which raised money in Europe, taking advantage of European savers to fund U.S. growth. That too, seems to be fading – as capital investment declines.
*** But the financial media (and investors) are still very bullish on the dollar. “The euro on borrowed time,” says today’s Reuters headline. The inertia of sentiment has left mainstream investors with a target of 80 cents for the euro – even though the friendless currency may now be headed in the opposite direction. It is at 84 cents this morning.
*** The Nasdaq barely made it into positive territory on Friday. Once it was thought that technology was immune to bad news. Now it seems resistant to the good news too. The index ended the week down 6% – or 19% for the year.
*** Gold fell 70 cents on Friday.
*** “Despite wide press coverage of the price fixing scandal at Sotheby’s and Christie’s, anti-trust charges levied at Visa and Mastercard, and the ubiquitous central bank euro intervention,” writes the international Harry Schultz, “the mainstream press won’t even consider the possibility of meddling with gold prices. Yet, there hasn’t been a free market in this precious metal for years. Recent intra-day price fluctuations tell the real story.”
*** Investors Business Daily’s index of leading mutual funds is down 6.10% per year.
*** Eight IPOs are scheduled for this week. It will be interesting to see how they do.
*** “Before trading was suspended in the stock last Wednesday,” says John Myers, “Nortel had fallen $24. The stock is now down almost 50% in just seven weeks. Across the board the Canadian blue chip index is down 23% from highs achieved in early September. But despite the carnage, the TSE Oil & Gas index has held up remarkably well, which is great news for investor’s seeking refuge from US market volatility.”
*** It is a dark and stormy morning out here in Poitou. This is a holiday week for school children in France – Tous Saints. But I fear there are more gloomy days ahead. More below.