Seriously, imagine that Apple`s corporate treasurer is way ahead of the curve and realizes he needs to put his $100 billion of cash somewhere else. It would be really freaking hard to invest that much cash somewhere in some kind of form where it would be available on short notice, even at a loss. I somehow can`t see Apple (or if some massive mutual fund cashes out of equities) parking all that cash in warehouses of precious and industrial metals, and acres of timberland, even if there was enough of it to buy. The haircut if they had to exit any such investment quickly and in large volume would dwarf the haircut they would take from your hypothetical Treasury default.

I think that the only option for Apple's corporate treasurer in that situation would be equities.

Big multinational stocks are the only tangible asset class big enough and liquid enough.

If I've got so much money that hard commodities are not an option, I'm buying Coke, Proctor and Gamble, Microsoft, Exxon, Berkshire Hathaway, etc.

They will be getting crushed too, but if we continue to have any economy at all, they will have some value.

Let`s use an example like insurance companies and pension funds like CALPERs, who by law could not put huge chunks of their funds into equities or illiquid assets like real estate and commodities. What are they gonna do?

Think outside the box.

It's very likely that if all conventional markets fail that someone somewhere might think up of a place to hold people's money, much like the bundled bad mortgages that put us in this mess in the first place.

Not necessarily a "good" place, but a new place.

I don't think financial architects have any sort of problem scheming up a new idea if they need one.

My mind keeps going back to what happened to Treasurys when S&P downgraded them - cash flooded into Treasurys.

I agree with Tim - UST is the last refuge for money. We are the world's reserve currency, so people have to buy dollars to conduct international trade. The consequences of "bond vigilantes" taking the UST to task would be so severe that there is no incentive to do it, since the bond vigilantes will get crushed along with everyone else if the UST tanks. Anywhere they would put their money would get obliterated if the UST tanks, so why tank it?

At that point will definitely and definitively be some time in the next year to twenty-five years, without a doubt. Probably.