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TWST: Caesar, the hedging activities of the gold producers, which have been touched on already in this panel, have been the subject of much scrutiny recently. Why is this issue receiving so much attention now?

Mr. Bryan: Because the price of gold went up, and the strategy was a great strategy in the declining market, but it's not a good strategy in an environment with higher gold prices.

TWST: Will you explain that for our readers and for me?

Mr. Bryan: Maybe I should defer to John. It's an area in which he is the world's acknowledged expert. I'm more than happy to comment, but maybe he should take over and just run through it.

I answered the question by saying that the gold price had fallen, and that was fine. It was a great revenue-enhancing strategy. But in a high gold price it's a mirror image. And then the follow-up question is to explain the mechanics, and I think it's better for John to do it.

Mr. Hathaway: There's no question that the scrutiny has increased substantially among all the sellside and buyside people. Investors worry about the financial risk assumed by the company that's doing the hedging. The prime example is Ashanti (NYSE:ASL), which has effectively destroyed shareholder equity by recklessly playing in the market with their hedge book. Not to single out the Ashanti management. They're just Goldman Sachs roadkill as far as I'm concerned. The bullion dealing community and management together share the responsibility. But Ashanti is a company with first rate assets that during the gold rally has seen its share value cut by more than 50%. They're still in great financial jeopardy as to the survival of the shareholders' interest. Months after the hedge book crisis was first announced, the financial morass remains unresolved.

The reason for investor concern is that there is another Ashanti lurking out there, and let me just give you my thoughts on that particular subject. My take on this, after having thought about it seriously and talked to a lot of companies, is that the bullion dealers are at the greatest risk. Although many companies may have some margin call provisions, by far the greater risk has been assumed by the bullion dealers.