A judge ruled Argentina owes $5.4 billion, not $1.7 billion - now here's the freakout everyone expected

On Friday, New York Judge Thomas Griesa ruled that Argentina owes creditors $5.4 billion now, not the roughly $1.6 billion it did before.

That's because he's allowing a bunch more creditors, or vulture funds as Argentina calls them, to enter hedge fund manager Paul Singer's long-standing lawsuit over Argentine debt dating back to the country's 2001/2002 default.

It's quite a lot of money for a country with about $30 billion in its Central Bank.

So naturally, the Argentine government is having the complete and total meltdown we've all been waiting for since the idea of letting more creditors in was floated months and months ago.

This time the melt down was brought to us not by President Cristina Fernandez, but by Economy Minister Axel Kicillof. He says he knew the U.S. Court would try to pull some funny stuff.

"What's happening now is what the [Argentine] government said would happen. It wasn't just the US$1.6 billion of Paul Singer but a lot more money instead," Kicillof said in a press conference, according to the Buenos Aires Herald.

The idea that more creditors would jump into the case has come up before in an even more bizarre manner. Until January 1, 2015, Argentina said that it could not negotiate with anyone or it would trigger something called the RUFO clause that prohibited negotiations. Of course, RUFO expired and the negotiations never came. Hence NML's continued full-court press in New York.

The proceedings that led to Friday's ruling follow a decade of legal battling between Paul Singer, CEO of hedge fund Elliott Management and leader of a group of creditors known as NML, and Argentina.

In short, Argentina says NML should take a 70% haircut on the debt the country owes, like over 90% of other creditors did in 2005 and 2010.

NML disagrees. That disagreement ultimately pushed Argentina into a technical default that it has been ignoring since last summer.

Default or no, Argentina won't sit at the table negotiate, it keeps trying to violate the ruling of the American court whose jurisdiction these bonds are under, and it keeps trying to issue new bonds to raise cash to add to the $30 billion pile in its Central Bank.

Argentina just does not care.

So Singer decided to make them care. As did a bunch of other "me-too" creditors who had not jumped into the fray until now.

Last month they asked Judge Griesa to let them in on the case, and Judge Griesa - taking Argentina's intransigence into consideration, obliged them on Friday (you can read the full ruling here).

One pro-Argentine government economist, Fernanda Vallejos, told Argentine news station Telam that the government saw this coming. She told everyone that Argentina's lawyers are surely working on this matter, and that Argentines should "be at peace knowing that the government has made all the best decisions possible for the best interest of the country."

Kicillof, meanwhile, thinks more me-too bondholders could come forward at the pleasure of Judge Griesa, and that Argentina's tab could explode even more.

Kicillof says that would lead to dire circumstances for Argentina. It would have to take on new debt to pay its old debt. Then, he warned, international agencies would make the government implement adjustments and privatize state companies."

That's scary stuff. Not that Kicillof is fear mongering or anything. But like, that's bad.

It's possible Argentina could still negotiate its way out of this. Who knows what's on the table. Hopefully some of that famous steak they've got down there.