The 'Justes' and the Good: More Real Heroes, Part II

The Daily Reckoning PRESENTS: In part two of this essay, Bill Bonner discusses the simple act of planting trees. What’s so heroic about planting trees, you ask? Read on to find out how one man changed the face of an entire landscape forever…


It is a small and thankless matter to plant a tree. Oaks, for example, usually grow so slowly that the planter rarely lives to see them in graceful maturity. Still, people plant trees.

Jean Giono tells the story of a man who – for no reasons but his own – began planting oak trees in the South of France.

“About forty years ago I was taking a long trip on foot over mountain heights quite unknown to tourists in that ancient region where the Alps thrust down into Provence. All this, at the time I embarked upon my long walk through these deserted regions, was barren and colourless land. Nothing grew there but wild lavender.”

There were few trees and fewer men in that desolate area. But a solitary shepherd had an idea. He began carrying with him a bag of acorns and a heavy iron rod. As he tended his sheep, he poked the iron bar into the ground and dropped an acorn into the hole. This he did for decades. There was no re-forestry program. There were no government grants. There were no parks commissions, no botanists, no taxes, no fees. There was just a lone shepherd, aged 55. Mr. Giono met him before World War I.

His name was Elzeard Bouffier. He had only the company of his sheep and his dog. He had never studied environmental science, nor perhaps ever even gone to school. But he could see that the land had changed since his youth. The area had been rich in grass and trees…animals…and human beings. You could tell because whoever had once lived there had left behind their stone houses on the hillsides. They had apparently overgrazed the grass and overworked the land. Worst of all, they had over-cut the forests that once grew there. Of the twisted oaks that used to provide shade and hold the moisture close to the ground…only a few remained.

Bouffier asked no one’s permission. He put no issues or referendums on the ballot. He rallied no citizens and spoke to no town meetings. As far as we know his name never appeared in the paper – until after he was dead. But he went about the work that he had taken up himself…with no pay, no thanks, and not even any notice.

He planted thousands of oak trees, many of which died at first. And for the rest too, progress was as slow as an oak. But gradually, more and more took root. And each one provided more shade…more moisture…and a more hospitable place for other life to take root. Animals returned…and then hunters…and then game wardens.

“In 1933 [Bouffier] received a visit from a forest ranger who notified him of an order against lighting fires out of doors for fear of endangering the growth of this natural forest,” Giono reported. “It was the first time, the man told him naively, that he had ever heard of a forest growing of its own accord. At that time Bouffier was about to plant beeches at a spot some twelve kilometers from his cottage. In order to avoid traveling back and forth – for he was then seventy-five – he planned to build a stone cabin right at the plantation. The next year he did so.”

The re-growth of the ‘natural forest,’ was a wonder to everyone. In 1935 a government delegation came to examine it. They didn’t know what to make of it. They merely placed it under government protection.

By now the oaks were 20 to 25 feet tall. The slopes were covered with them. And the old man was still at work, planting his stealth forest.

“I remembered how the land had looked in 1913,” Giono wrote. “A desert…[but] Peaceful, regular toil, the vigorous mountain air, frugality and, above all, serenity in the spirit had endowed this old man with awe-inspiring health. He was one of God’s athletes. I wondered how many more acres he was going to cover with trees.”

By 1945, another war had passed. Bouffier was 87 years old and still at it. He had spent the second war as he had spent the first one. While millions of armed men tried to improve the world by killing each other, the good shepherd continued to improve his world. And in the process he improved ours.


“In 1913 this hamlet of ten or twelve houses had three inhabitants. They had been savage creatures, hating one another, living by trapping game, little removed, physically and morally, from the conditions of prehistoric man. All about them nettles were feeding upon the remains of abandoned houses. Their condition had been beyond hope. For them, nothing but to await death – a situation which rarely predisposes to virtue.

“[Now] everything was changed. Even the air. Instead of the harsh dry winds that used to attack me, a gentle breeze was blowing, laden with scents. A sound like water came from the mountains; it was the wind in the forest; most amazing of all, I heard the actual sound of water falling into a pool. I saw that a fountain had been built, that it flowed freely and – what touched me most – that someone had planted a linden beside it, a linden that must have been four years old, already in full leaf, the incontestable symbol of resurrection.

“On the site of the ruins I had seen in 1913 now stand neat farms, cleanly plastered, testifying to a happy and comfortable life. The old streams, fed by the rains and snows that the forest conserves, are flowing again. Their waters have been channeled. On each farm, in groves of maples, fountain pools overflow on to carpets of fresh mint. Little by little the villages have been rebuilt. People from the plains, where land is costly, have settled here, bringing youth, motion, the spirit of adventure. Along the roads you meet hearty men and women, boys and girls who understand laughter and have recovered a taste for picnics. Counting the former population, unrecognizable now that they live in comfort, more than 10,000 people owe their happiness to Elzeard Bouffier.

“When I reflect that one man, armed only with his own physical and moral resources, was able to cause this land of Canaan to spring from the wasteland, I am convinced that, in spite of everything, humanity is admirable. But when I compute the unfailing greatness of spirit and the tenacity of benevolence that it must have taken to achieve this result, I am taken with an immense respect for that old and unlearned peasant who was able to complete a work worthy of God.

“Elzeard Bouffier died peacefully in 1947 at the hospice in Banon.”



Bill Bonner
The Daily Reckoning
February 16, 2007

Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

In Bonner and Wiggin’s follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is – an empire built on delusions. Daily Reckoning readers can buy their copy of Empire of Debt at a discount – just click on the link below:

Empire of Debt

It’s the Battle of the Bubbles, dear reader. No, we’re not talking about hedge fund managers out on the town, squirting each other with Dom Perignon. This is different…but it still might be fun to watch.

Everything is hunky dory, of course. Nothing to worry about. Really – Ben Bernanke just said so. Who wouldn’t believe the world’s most powerful central banker on a matter of money?

Bernanke told Congress on Wednesday that he saw no compelling reason to tinker with interest rates. And why should he, when everything is going so swimmingly? On Thursday, all three Dow indices hit new all-time highs.

Frankly, we’re getting a little tired of the whole thing. All this happy moderation, we mean. We’d like to see a little action…a little clarification…a little vindication.

Do you see what we’re getting at, dear reader?

Everything is going along just fine – except for everything that matters. But what matters most is what appears to not matter at all.

And right now, there are two related things that appear not to matter. First, the bubble in U.S. residential housing is steadily losing air. And second, the bubble in worldwide liquidity is getting bigger than ever.

Foreclosures in the Denver area, we found out yesterday, are running at five times the level of 2003. According to the local news from Denver, there are whole neighborhoods that are sinking under foreclosure. In some of them, as many as one in four houses are in foreclosure. Imagine if you owned one of those that wasn’t. You couldn’t expect to sell it for a reasonable price – if you could sell at all.

And subprime lenders are taking a beating. For example HSBC, which decided to get into the mortgage lending business on the wrong end – where the customers didn’t have any money – recently issued the first profit warning in the company’s history. And the firm has been around since before John Wilkes Booth put a bullet through Abe Lincoln’s head. Century Financial also announced extraordinary charges resulting from bad mortgage loans. And the subprime lending firm Ownit, actually went bust after realizing that its customers neither owned it nor could pay for it.

The great residential property money machine is on the fritz. Normally and naturally we could expect an economic slump in the United States. It is a consumer society, after all. Consumers have come to rely on rising house prices in order to continue spending at the rate to which they have become accustomed. No rising house prices equals no equity to ‘take out’, which equals no money to spend.

We just read about a Ms. Lehn in Minneapolis who is facing 20 years in the state pen. Her crime? She decided to ‘take out’ equity before there was any equity to take out. She defrauded lenders into lending more than the actual sales price, thereby liberating future equity for use currently.

She hasn’t been sentenced yet, and it’s none of our business, but we urge the judge to go easy on Ms. Lehn. For what did she do that the whole nation did not? Except for lying on a few documents? Homeowners as well as the feds themselves have all been taking from the future, by running up debts that will have to be paid out of money that hasn’t been earned yet.

As the bubble deflates, you would expect that it would be harder to pay those debts…and that a lot of people won’t be able to do so. Thus, Realtors might want to consider their career opportunities in a new light. Instead of becoming waiters, they might want to get into foreclosures, work-outs, debt management, and bankruptcy – all of which are sure to be growth industries.

But wait. The other big trend that people don’t think matters takes us in the opposite direction. While the U.S. housing bubble loses air, the worldwide bubble in liquidity gets huge new gusts of it.

Ed McCarthy, president and CEO of Financial Risk Management Advisors Company fills us in:

1. Over the last five years, the balance sheets of the Investment Bank community have expanded exponentially. We include all of the major foreign Financial Institutions of this caliber, as they already are as much or more investment as they are commercial. In the aggregate, globally, the total footings of these majors is well over $7-8 trillion.

2. Hedge Fund total assets have grown from $300 billion to approximately $1.4 trillion and the leverage on top of that is unknown but, in all probability, at least another [one and a half to two] trillion [dollars].

3. Private Equity funds availability has gone to approximately $1.1 trillion, and the leverage can be as little as [four] or [five] times cash flow on the deals they are in or as much as 10, 12 or even 15 times.

4. Credit Default Swaps have grown from less than $1 trillion to $14-16 trillion in the United States and at least $26 trillion globally as last reported by the BIS and probably substantially more. Our theorem here widens to include a hypothesis. The buyer of a CDS may simply be taking out default insurance. On the other hand, we cannot but theorize as was and as continues to be the case in the mortgage industry where, much more massively but still there, the GSE’s could load up their balance sheets to over $3 trillion and take on an equivalent amount in contingent liability through their ability to Guarantee. The same, in a somewhat different way pertained in the MBIA, MGIC world.

And thus is the stage set for the Battle of the Bubbles. Will the rush of money and credit into global markets overwhelm the hiss of air coming out of America’s deflating property? Or will the jagged end of the U.S. housing wreck prick the big bubble and cause the whole thing to pop?

We don’t know…but we still go out every morning and hoist our “Crash Alert” flag anyway – and hang on to our gold. Just in case.

More news:


Chuck Butler, reporting from EverBank’s world currency trading desk in St. Louis…

“While I’m skeptical of this printing of the TIC Data, it does show that the investment flow went NEGATIVE in December. That’s right! NEGATIVE! Obviously, there could have been some year-end ‘window dressing’ by money managers… But still, NEGATIVE?”

For the rest of this story, and for more market insights, see today’s issue of The Daily Pfennig


And more views:

*** The scientific community seems to be unified in the belief that global warming is a threat…and not for the first time. This from Porter Stansberry:

“As Dennis Gartman reminded me today, a 1975 Newsweek cover story proclaimed:

“‘The evidence in support of these predictions has now begun to accumulate so massively that meteorologists are hard-pressed to keep up with it. In England, farmers have seen their growing season decline by about two weeks since 1950, with a resultant overall loss in grain production estimated at up to 100,000 tons annually… Last April, in the most devastating outbreak of tornadoes ever recorded, 148 twisters killed more than 300 people and caused half a billion dollars’ worth of damage in 13 U.S. states.

“To scientists, these seemingly disparate incidents represent the advance signs of fundamental changes in the world’s weather. The central fact is that after three quarters of a century of extraordinarily mild conditions, the earth’s climate seems to be cooling down. Meteorologists…are almost unanimous in the view that the trend will reduce agricultural productivity for the rest of the century. If the climatic change is as profound as some of the pessimists fear, the resulting famines could be catastrophic.”

*** Yesterday, we looked at Japan. We’re long on Japan, we said. Today comes word that Japan’s economy is expanding at its fastest rate in nearly three years…and twice as fast as the United States. Japanese stocks, too, are in an upward trend.

We don’t claim to know anything about Japanese companies. It is the yen that draws us to them. Our guess is that the yen will go up. If that happens, a yen-denominated stock should go up too.

The yen is perhaps the most un-loved major currency in the world. The only people who seem to like it at all are those who borrow it; and they do so only to be able to trade it for some other currency. The yen has become like the poor boy your daughter gets to take her to the party, just so she might meet someone she really likes!

But the beauty of the investment world is that the nerds and rejects get their moments of glory too. The yen – disrespected by practically everyone – must be ready for a little upgrade.

Ian Davis gives us a little background:

“On September 22, 1985, France, West Germany, Japan, the United States, and the United Kingdom all agreed to a radical revaluation of world currencies. On that day, these countries signed the Plaza Accord, stating that they intended to devalue the U.S. dollar in relation to the Japanese yen and the German deutsche mark through intervention in the world currency markets.

“Between 1985 and 1987, the yen appreciated by 100% relative to the U.S. dollar. A similar revaluation could happen again soon.

“Today, the yen is even cheaper relative to the U.S. dollar than it was in 1985. Furthermore, the amount that Japan exports as a percentage of its GDP is higher today than it was in 1985, before the yen was revalued.”

If this moderation continues apace, you might expect the yen to remain low…and still enjoy continued reasonable growth in your Japanese stocks. If the moderation ends in a frenzy, however, the yen could be revalued in a hurry, as the yen carry trade is unwound. Speculators owe billions of dollars worth of yen – perhaps even a trillion. When they go to repay, yen will be the big man on the currency campus.

The Daily Reckoning