If you have a day job like mine, you understand this. Most people are pooched. The proportion of household net worth in real estate has skyrocketed, along with debt loads. Every month that people save nothing they grow more unbalanced in their financial lives.

Without much in retirement savings – or investments of any kind – their only long-term salvation is continued appreciation of their houses. So far, so good – at least in most major markets. But with 70% of people already owning real estate, debt cresting and family balance sheets so lop-sided, how long can it last? If wages don’t leap higher, where will the money come from to keep housing alive? And in an economy where growth’s fled and the dollar sagged, surveys show most people worry about just staying employed.

Daily, realtors come to this pathetic blog to warn renters if they don’t buy now they risk being priced out forever. It’s an irrational, emotional, fear-infused message as effective as it is irresponsible. After all, we have enough real estate. More than enough. What we lack collectively is money. Wealth is concentrating in the hands of the 1%ers, while the rest of the herd chases a roof. You may remember a chart I posted here previously, showing the rich hold assets while the rest hold debt. Not a day goes by in my work that this is not reinforced.

The Canadian middle class, by and large, owns one asset. As a result, housing is a record hunk of the economy. If that doesn’t scare you, pay better attention. This will be a game-changer. It’s the reason I keep urging people to acquire financial assets. The gathering danger is enormous.

I was reminded of this when an Ontario chicken farmer named Glenn sent me the following chart. He accompanied it with this:

“The household bank accounts in Canada are running dry. This graph shows the average values in financials that are becoming more and more skewed in favor of the 1%ers every day.

“This means that the majority of Canadians have been in deficit for some time, and will soon exhaust all available sources of credit. That’s when a sudden and critical collapse of the bubble finances will occur. You can start holding your breath, for we do not have much longer to wait.”

Glenn’s chart shows savings expressed in terms of disposable income – and an annual decline of more than 8% a year. And remember where most people put those savings, inside RRSPs, TFSAs or the bank? That’s right, GICs or ‘high-interest’ accounts earning nothing. What a time bomb.

Just to give Glenn’s concern a little more context, here are some other visuals adding to the story. For example, most families are falling behind when it comes to income. Wages and salaries as a percentage of the economy (a measure of whether people are keeping up with inflation, for example) have been on a serious decline since 2000…

…and yet we’re spending more, certainly on real estate which has turned into the repository of almost all middle class wealth. This chart is a couple of years old (feel free to post an update, if you find one), but clearly shows home ownership levels ballooned, especially as interest rates fell.

Put it all together, as this Business in Canada chart does, and the result is clear. A credit-fuelled bubble in which debt levels and real estate prices soar together. If Canadians had only 50% of their net worth in housing, the ultimate unravelling of this would be serious and painful. But with 85% of its net worth here, the middle class is simply reckless.

None of the above precludes prices from rising this Spring, or your daughter from lusting after a condo she could rent for half the cost. It doesn’t mean an end to yuppie bidding wars or everybody you know equating real estate with wealth. Human nature won’t change until forced to by overwhelming circumstances.

Then, well, too late.