They do look like they're hanging, don't they? I've been thinking about this too.
I think it's partly because the ponds aren't like a swimming pool: they're bowl-shaped, so the part at the edge is relatively shallow.
He's got good stabilizing trees and plants to anchor the soil, and he's got some good sub-soil structure.
He sealed the ponds well, and manages the water so the dam wall doesn't get saturated and as Paul says, "go downhill to visit the neighbors."
He's also on a mountain, good solid rock and not a ton of soil on top.
He talks about it in the "Sepp Holzer's Permaculture" book. It's a great read.
Well, that's my guess anyway. I think it's accurate, but I could of course be wrong. It's happened once before. Or maybe twice...darn memory!
