Venezuela refuses to default. Few people seem to understand why.

The next argument is something of a conspiracy theory born in part out of the opaque nature of the country’s finances. It posits that close associates of the administration are major holders of the country’s bonds and that the government fears it’d lose their much-needed support if the payments stopped coming in. Efforts to obtain comment from government press officials on this and other aspects of the story were unsuccessful.

The third theory, and it’s one that ties back into the first idea, states that even though Venezuela lost access to international capital markets a long time ago, a default could still deepen the government’s cash squeeze by triggering legal action from creditors that would undermine the country’s ability to export. If fewer petro-dollars flow into the country, the savings from the default could be washed away, making the situation on the ground even worse.

It’s frankly hard to imagine what a further deterioration would look like.