I am 29 years old, and my brother is 33. I was complaining to him that even after a decade of post-secondary certificates, I am not middle-class because I cannot afford a house. The fact that I landed a decent job right out of school shows that I’m lucky as well as good at what I do. My brother made a great point, saying I am middle-class, but middle-class for my particular generation. The point us pathetic, whining Gen Y are trying to make is that for a relative level of success within one’s cohort, there was a lot more material wealth for the baby boomer generation than there is for Gen Y.

Where would this blog be without whining and moaning? The landlords dis the renters. The doomers lament the bankers. The natives flame the HAM. Everybody slams realtors. And Boomers are dead meat.

Some weeks ago, we just learned, Finance officials prepared a study for their craven deity, F, called “The Economic and Financial Situation of the Canadian Middle Class.” In summary, it sucks. Turns out the Occupy kids were right. Wealth is flowing up at a helluva clip.

The top 1% of Canadians have 26% of the money and pay a third of the taxes. There are about 422,000 people with more than $1 million to invest (not counting real estate) which is 1.2% of the population. Of this group, 28% live in Toronto, 12% in Montreal, 7% in Calgary and just 5.9% in Vancouver – where houses cost the most.

Meanwhile the middle is shrinking, at least in income and net worth. In the last three decades salaries and wages have grown by 0.2% a year, after inflation, or five times less than for the guys at the top. At the same time, median wages have actually declined, meaning more people work for less. Of course, these are better-educated workers, since today only crossing guards and strippers (at least the bad ones) don’t have arts degrees.

Since 2007, median family income in Canada has crawled ahead, from $66,700 to $68,000. At the same time, household debt has grown from just over 100% of income to more than 160%, even as interest rates crashed. The average Toronto house costs 41% more. The average Vancouver house grew 90% more expensive between 2002 and 2007, and has added 60% since.

Today wages and salaries are rising at 1% less than inflation, and credit growth continues to expand – but at the slowest rate since 2009 as families tap out. If interest rates were to normalize – which would double current levels – just imagine the result. This is the nightmare scenario that the Bank of Canada and the elfin deity worry about. It’s exactly why they trashed 30-year mortgages, slapped CMHC around and told banks to stop lending to anyone with a pulse.

So, in summary, the Canadian middle class is in desperate shape. The savings rate has fallen to 3.8% (twas 19% two decades ago). Over 80% of people no longer put money into their RRSPs. Seven in ten don’t have pensions, and a recent survey found a third of us have ‘no wealth’, while a quarter have never saved money. Any. Ever.

And yet 70% have houses. See the problem?

The haters don’t. Being ‘middle class’ is overwhelmingly equated with owning real estate. But if that were the sole measure, we’d have one of the most impressive middle classes in the world. Ironically, it’s this very myopic and destructive house horniness which has helped lead to this mess. Kids covet granite more than financial freedom or mobility. College grads just can’t wait to get mortgaged. Young couples would rather pay double the monthly nut to ‘own’ a condo they don’t actually own at all, than to rent it, and have no debt.

How is this the fault of, say, the Boomers?

It isn’t, of course. Most of the wrinklies are just as screwed as the kids, but with less time to recover. The home ownership rate among Boomers is a staggering 78%, and overwhelmingly they have concentrated most of their net worth in this single asset. In order to get it out and obtain what they really need, which is income, these drugged-up geriatrics in their thirsty underwear will have to bail out of real estate, starting in the next few years.

There’s no choice. Most have little in the way of investment portfolios. CPP pays at best a grand a month and OAS is a measly $537 – nobody can have a decent urban life on that. There’ll be no option but to sell, downsize or rent.

And who will be the buyers? The kids, of course, over-educated, underemployed and asset-poor. They will not be able to afford the prices the Boomers ask, which means those prices will fall. This is one reason the long-term future of real estate is troubled, and a lesson in how economic imbalances are corrected.

Between now and then, expect volatility, confusion and contradiction. The process won’t be quick or clean. Prices will look impenetrable, until suddenly they’re not. Sellers who wait will suffer, to the benefit of buyers doing the same. And in the absence of a healthy and growing middle class, fueled by new investment and stable, lucrative jobs, the speed of change will shock countless Boomers.

They should count on losses. But no pity.