It's a horrible situation to be in because the aged pension does little more than provide for survival and even that is likely to be reduced as the Government fights the economic impact of an ageing population.

The combination of a longer life span and inadequate superannuation means the ranks of the retired poor are likely to swell further and the dream of leaving your kids a healthy estate is becoming just that a dream.

Mind you, I can't understand why people would scrimp and scrape in retirement just to leave their kids an inheritance. In my view, they are big enough to look after themselves.

For cash-strapped retired home owners the solution to their financial crises could be unlocking that cash tied up in their house. Called reverse mortgages, these loans are growing in popularity among retirees struggling to maintain their lifestyle.

They work in the opposite way to a home loan. Instead of the home loan diminishing because of your repayments, there are no repayments, so the interest is added to your loan and increases the debt. While you're not required to make any repayments, the impact of fees and interest means the debt grows over time.

The lender allows you to live in the house until you sell or die. If you live with a partner or spouse and they're joint owners of the house, the reverse mortgage would be in both names so your home is protected as long as one of you lives there.

But if only one of you owns the house, be warned: the loan will only be in one name so it will have to be repaid when the partner who owns the house dies or moves into residential aged care. It could leave the surviving partner stranded.

The Commonwealth Bank, St George Bank and Bluestone have led the field offering reverse mortgages and are being joined by other newcomers, such as Macquarie, as demand grows and the market for normal home loans drops. Remember, banks make money from lending, so any type of new loan growing in popularity will attract their attention.

Providers have their own limits on how much can be borrowed, depending on the age of the borrower and the value of their house.

Sounds great. Access to cash, no repayments and you get to stay in your own home.

But at current interest rates, the amount you owe would double in fewer than 10 years. For example, a loan of $100,000 at 8 per cent would become $220,000 in 10 years, not including any fees. That produces the very real possibility of having negative equity in your house so it's absolutely vital to consider only products with a "no negative equity guarantee". Here, the provider and not your estate wears any shortfall.

You should also bear in mind that if you take the loan as a lump sum it may have an impact on your eligibility for Centrelink payments.

Overall, reverse mortgages can be a good alternative for asset rich, cash poor retirees who understand the consequences.

Don't forget the good oil on the historical rise of gold

While the attention of many investors of late has been on the rocketing oil price, research house Fat Prophets says that we shouldn't overlook the consequences for gold.

Oil and gold have been strongly correlated historically, and Fat Prophets believes this is set to continue with the precious metal heading towards $US850 an ounce.

In local terms, gold reached a 14-year high of $650 in February 2003. Since then, prices have corrected and consolidated within a wide range between $590 and $512.

Fat Prophets predicts the main drivers of the gold price will be:· The US current account deficit, which is unsustainable and could potentially disrupt world financial markets.· A sharp plunge in the US saving rate as the rest of the world (China and Japan in particular) have exported capital to the US. Never before has there been such a widespread disparity between high and low saving rates in OECD countries.· US consumers overborrowing against rising house prices.· Heavy buying of gold from Japan and China.