It would only be unsustainable if you returned to your previous eating habits. It's help to kickstart you into eating properly, especially if you are severely overweight and need to lose a lot of weight. It is fat loss, because the HCG is taking nutrients out of your body's fat stores.
I can't explain it as well as the website can.
(you need an account to see links)
But it was featured on Dr. Oz, The Today Show, and a few other reputable sources as being a legitimate diet and not a passing fad.
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Also, I could be wrong about 40 pounds in a month - all I know is that she lost that much and she could have been doing it over a two month period, although it's not recommended to do it for longer than forty days.