im not an economist. i dont have a PHD. and i dont trade currency markets. but, every once and a while i notice that the IMF keeps loaning argentina money to make payments on debt they cant service. it'd be like a bank loaning you money every month to make the mortgage payments to them even though you are broke (or worse than broke). of course, the debt just keeps growing which would be ultimately more onerous, if in fact you ever intended to reduce the principal. the lender carries the "performing" debt at the note value. when say a $10 billion payment is due, they increase your loan by $10B and then show a $10B payment being made. the loan's only performance is in the bookkeeping. in this mornings IBD, there is a small blurb that the $90+B in argentine debt of last year now has a "value" of +/-$50B due to conversion of the debt to local currency.... did the IMF and/or other debt holders quietly just eat a $40B crap sandwich? isnt this a defacto writeoff/writedown of the debt? BTW, i think the IMF just sent them a few more billion bucks in loans, which they promptly paid the IMF back in payments on the existing debt. could someone a little smarter than me, maybe a currency trader, point out how this can ever work out in the long-term?