When a new dollar goes into the capital markets, after being bundled and securitized and lent several times over, where does it end up? When society's total savings increase, what capital assets do those savings end up invested in?

When economists talk about “capital assets”, they mean things like roads, buildings and machines. When I read through a company's annual reports, lots of their assets are instead things like stocks and bonds, short-term debt, and other “financial” assets - i.e. claims on other people's stuff. In theory, for every financial asset, there's a financial liability somewhere. For every bond asset, there's some payer for whom that bond is a liability. Across the economy, they all add up to zero. What's left is the economists’ notion of capital, the nonfinancial assets: the roads, buildings, machines and so forth.

Very roughly speaking, when there's a net increase in savings, that's where it has to end up - in the nonfinancial assets.

I wanted to get a more tangible sense of what nonfinancial assets look like, of where my savings are going in the physical world. So, back in 2017 I pulled fundamentals data on ~2100 publicly-held US companies. I looked at [...]