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strypey @
mshMy understanding is, but I have no references and am very open to correction, in an open global economy:
1) It basically only works entirely like that if you're the country issuing the the world currency reserve currency.
2) If you're powerful and credible enough to issue your loans in your own currency, it works a bit like that, but people will be more wary of you running too big a pile of sovereign debt compared to your turnover.
3) If you can't even issue your debt in your own currency, you're just a normal business with an unusual business model.
Hong Kong is special, as it has its own currency, but it has no central bank and it doesn't use sovereign debt to create currency or finance operations. The only HKD that exist are those issued by the Monetary Authority (HKMA) in exchange for USD, those issued by the private banks, as loans and as 20-to-1000-dollar bills, and those issued by the HKMA as coins and 10-dollar bills.
The government does borrow money, but not as an economic instrument, only to finance specific projects, and the level of debt is nil compared to most countries.