Since the dawn of time, US Treasuries have always been regarded as a risk free asset. The budget battles in Washington D.C. are causing some investors to re-consider this as a technical default may occur. Some large investment firms are buying credit default swaps against the US. This is insurance against a default of US sovereign debt. The buyer pays a periodic rate to the seller. The seller is obligated to reimburse the buyer for the debt at par if the US should default. A default may be not making a payment or breaching a condition of the bonds. The definition is part of the terms of the swap. Another way to hedge against a US default is to buy assets from countries with economies based on commodities, commodities themselves or emerging markets.
The source for this post, where more details are available, is here.
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