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Sherm Lott keeps a small bag of silver coins hidden away in his Salt Lake City home.
For Lott, who inherited the pre-1965 dimes, quarters and half-dollars from his father, the money represents an insurance policy against the tough economic times and inflation he believes lie just ahead.
"I'm worried about inflation and that the government is broke. I'm worried the dollar is going to lose all its value," Lott said. "If that happens, we're all going to be in for some tough times. Having a little silver or gold on hand won't hurt."
Utah is in the midst of a gold-and-silver rush of sorts, a scramble ignited by soaring precious metal prices as well as fear the Federal Reserves' policy of low interest rates and aggressive money supply growth will trigger inflation that in turn will doom the dollar and wipe out savings.
"People are being inspired to sell by the higher prices but at the same time, there is this underlying fear of inflation that speaks of a lack of faith in the Fed," said Chris Wright, a vice president at Cascade Refining, a West Valley City company that buys and refines scrap gold and silver. "That fear also is helping keep the prices up."
Such concern led Rep. Brad Galvez, R-West Haven, to successfully sponsor HB317 in the Legislature. The bill, which awaits Gov. Gary Herbert's signature, would require the state to recognize gold and silver coins issued by the federal government as legal tender.
"This is a step in preparedness," Galvez said. "It underscores the concern many Utahns have about what is happening to the value of their money. And it will allow us to help protect our economy as the dollar continues to shrink in value."
Gold and silver (known as the "poor man's gold" because it is much cheaper) are viewed by many as offering a store of value in uncertain economic times. Such "hard money advocates" believe because gold and silver supplies increase slowly, using such coins or linking paper money to a fixed amount of either precious metal will ensure its continued value and control inflation.
Fifty years ago someone could buy a loaf of bread with a silver dime, argued Larry Hilton, a Highland lawyer who helped draft the Galvez bill. "Today you could still buy a loaf of bread with a single silver dime."
Even if the nation escapes the consequences of its rising trillion-dollar deficits, Hilton said a system based on gold and silver just makes sense.
He hopes the bill he helped promote marks the beginning of an alternative or complimentary monetary system to the Federal Reserve and its printing presses.
"Utah can help lead the way," he said.
Yet not everyone is enamored with the metals.
"For everyone who comes in wanting to buy we have someone coming in wanting to sell their gold and silver," said Gaylen Rust, owner of Rust Rare Coin in downtown Salt Lake City.
Still, Rust sees an increasing number of retirees and those nearing retirement who are quietly buying silver and gold coins as insurance against what they fear will be a continuing decline in the dollar's value that will erode the purchasing power of their savings.
Veteran stock broker Mike Arnold of Edward Jones in Logan urges his clients to keep their exposure to gold limited to 5 to 10 percent of their portfolios.
"People got caught up in the dot-com and later the real estate mania," he said. "And here we are with gold being bid up."
He said a lot of people make money off the doom-and-gloom act. "But I'd be careful."
The staff at Cascade Refining also has noticed that the higher the price, the more people want to sell their gold and silver. And there have been plenty of opportunities lately with gold now trading at above $1,400 an ounce, or approximately 26 percent more than its price a year ago.
Silver, though, has been the big performer. An ounce of silver now is going for around $35, double what it was trading for a year ago.
Every time the price goes up it inspires more people to search through their jewelry boxes for chains and rings they no longer want or need, Wright said.
The strong price for gold and silver led Bob Pinkerton of Salt Lake City to visit Cascade Refining last week to sell a few rings and necklaces.
"Let's just say that a couple of years ago when I was out of work the gold and silver jewelry we had on hand came in real handy," Pinkerton said. "While I'm worried about the possibility of inflation, I'm worried about a lot of other things too, like being able to pay my bills." v