The truly major lenders are hardly dumb. Look, the money lent is not even really "owned" by the lenders (whether private or national) in the first place. It's not "money in the bank" that is lent--it is money created out of thin air that is then loaned out. These lenders profit off the interest payments, not the return of principal. They don't care that much about the principal and they know that it will probably never be repaid. Actually, like a credit card balance, they just want them to keep rolling the debt over because the longer you have an outstanding balance, the more interest you pay over time.

Ever wonder why so many of Greece's creditors agreed to 50, 60, 70% "haircuts" on the principal of their loans to Greece just a short while ago? They don't need the principal back. And they know that Greece needs to borrow a whole lot more, so they'll just replace the old loans with new ones in a short time and pick up where they left off.

International finance is a game, and if you want to stay in the game, you have to play by the rules, even if they don't make sense to your average person. It's similar to asking why the Chinese would keep buying billions in Treasuries when the US is continually debasing the dollar, which is akin to giving your alcoholic, unemployed father money for booze everyday. "That's crazy! Why give your father money?!" you think, until you hear the logic that this guy's father only beats his mother when he needs more booze, so letting him get booze keeps the peace and let's this guy continue living his life. He lives to play game for another day.

This post probably sounds like crazy talk to someone who hasn't heard these ideas before, but it is what it is.