Brent Danley on Flickr Wall Street's language is now being applied to the human race, and it has scary implications.

Viktor Shvets, a strategist at Macquarie in Hong Kong, has a big note out on declining productivity. In it, he took a common Wall Street metric usually applied to capital or equity and focused it in on humans.

His argument, in short, is that the "return on humans" is declining.

He said:

"Long-term structural decline in rate of “return on humans” due to deep structural changes in relationships between humans; humans & machines; humans, machines & society. The pressure has been intensifying over the last three decades with the peak of ‘crescendo’ just around the corner."

The bigger picture here, according to Shvets, is that the global economy is stuck in stagnation. There is, according to Shvets, "no growth; no trade; no return to conventional business and capital market cycles for years to come."

The heart of the problem, according to Shvets, is a lack of productivity.

There are two key drivers of this lack of productivity, according to the note. The first is overleverage and overcapacity in services and merchandising economies, and the second is the decline in the "return on humans" during what it describes as the third industrial revolution.

The note said (emphasis added):

"It takes around 50-70 years to start enjoying productivity gains. However, the 3rd Industrial Revolution is even more disruptive than the first two, as it aims to replace rather than augment humans. In the middle of Industrial Revolutions, productivity rates tend to decrease; income & wealth inequalities rise; social and geopolitical tensions escalate."

Sound familiar? The note added:

"Technology is entering the sharp end of the S curve; innovations are multiplying in geometric progression vs. slow take-off in 1980s-00; it is destroying the middle class (i.e. accountants; lawyers; traders; logistics; clerks; pilots; economists; editors; investment advisors) and fissuring labour force (contingent employment). Whilst new jobs are created, these tend to be lower productivity occupations (at least in the first several decades)."

Shvets argues that this is being exacerbated by loose monetary policy, as the flow of easy money is supporting consumption and slowing the closure of excess capacity and unproductive industries.

This is most clearly happening in China, and Shvets argues that this is now taking place around the world.

"We have described it as nationalization of capital markets and gross capital formation but in a polite company it might be called a 'mix of proactive fiscal and monetary policies,'" the note said. "In other words, state would directly intervene in supporting consumption (such as income guarantees; vouchers); sponsoring investment and assisting with overextended pension and welfare liabilities. All directly funded by Central Banks (no borrowings)."

That has broad implications for investors. Shvet is predicting a period similar to the 1930s following the New Deal policies and the late 1960s and 1970s and suggests focusing on a handful of themes in investing: