Thanks to a $29,000 investment in gold, Pocatello man Jon Norstog got a nod in the paper of record this week. Norstog’s nest egg may still shine, but since 2011 it has lost 42 percent of its value.
“I thought if worst came to worst and the government brought down the world economy, I would still have something that was worth something,” Norstog tells The New York Times.
Does this state, known for having its fair share of survivalists, have more than the usual number of gold bugs? “It might be logical to think that, but I’m not certain!” says Patricia Highley, a senior securities analyst with the Idaho Department of Finance. The agency regulates commodity investment contracts, but it has nothing to say about the cash purchase of gold.
Since the onset of the recession, the Idaho Legislature has seen proposals to make gold and silver coins a recognized form of payment. Highley recollects that as gold prices climbed, people called in asking about depositories and how best to store gold. Two years ago, the agency put out a press release warning consumers to inform themselves before putting their money into the precious metal.
Now, says Department of Finance investigator Tim Martin, falling gold prices are bringing on calls of a different sort. “What I have seen recently are quite a few cases of investors alleging they were defrauded by people who said they were going to develop a mine,” he says. “We see a lot more calls now that the market has fallen off.”
Such shell companies are a not uncommon form of fraud. “Like Mark Twain said,” Martin continues, voice smiling, “a mine is just a hole in the ground with a liar on top! That’s not always true, but that’s what he said.”
An earlier version of this article stated that Jon Norstog’s investment has lost 17 percent of its value. That was incorrect.