Okay, I'm still having trouble with the concept specifically quoted above, and yes I did read the rest of it.

Hypothetical: Brazil owes the US 10 dollars -- dollars, not Brazilian reals. In 1993 one dollar is worth say five reals. So 50 reals owed. The Brazilian government decides to print some extra reals to pay the US back. However, it seems to me that if they print a few more reals, they've devalued the real in relation to the dollar by inflating their own currency -- and so instead of owing us 50 reals like they did before, they owe us more, because 50 reals isn't worth ten bucks anymore. So they haven't changed the status quo.

I must be missing something obvious. Is it that Brazil's debt to the US is measured in reals not dollars no matter what? So as their currency hyperinflates the US can't demand more reals as payback? If that's the case why the hell do we loan money to countries that may ever become economically unstable?

I mean, I obviously know that inflation aides a debtor in general, but I figured that rule stops applying when only one currency in the equation is inflating.

(You have no obligation to teach me economics.)