No such place - your whole starting assumption is wrong, and your creationist friend is correct: matter is not expanding into space; space is simply expanding between matter, as predicted by General Relativity.
-shudder-
He's actually arguing a point for a "creator" by arguing the "on-going creation" of space between the various planets, stars, etc. It sounds like he actually is incorrect... but only in the sense that space is not "created", but rather that the existing space expands.
Right?
Neither are atoms, electrons, photons, etc. Tangibility is a purely macroscopic phenomenon involving near-infinite electromagnetic interactions between near-infinite numbers of photons and electrons associated with the atoms of the toucher and the touchee. Same with visibility...
I probably should have been a little more clear with that point. I wasn't trying to say that tangibility was the only thing that made something real... but rather that space was the absence of anything, including subatomic particles.
Let me approach it another way... you have a jar filled with a particular compound. You can tests to determine exactly what this compound is, what it is composed of, etc. If your hypothetical jar only had the void (and vacuum) of space "in" it... how would you determine that? How would you identify it as such?
The "balloon" analogy was constructed to precisely dispell the erroneous "cloud" analogy
Crap.
Does this somehow relate to my comment in the previous response about everything in the universe being "woven" together? If so, maybe I'm starting to understand.... (careful optimism LOL)