Actions being taken to supposedly cement the role of the US dollar as the world's reserve currency could be the beginning of a process by which the global economy slowly but steadily moves away from the greenback.

Forty years ago, the Plaza Hotel in New York entered financial legend. On 22 September 1985, in what became known as the "Plaza Accords", the US government persuaded Britain, Japan, Germany and France to jointly devalue the dollar in an attempt to boost the economic competitiveness of the United States. Is this about to happen again, but in Mar-a-Lago, Florida?

According to many financiers and those on the inside of the Trump administration, there is intense speculation that this is exactly what President Donald Trump and his advisers are planning to do later this year at his sprawling Floridian resort. It has even been dubbed the "Mar-a-Lago Accord".

What would be the point? At the core of the thinking is a paper by Stephan Miran, Trump's chair of the Council of Economic Advisors. He argues that the flip side of having the global reserve currency - which means you can run budget deficits ad infinitum without worrying about the theoretically limitless demand for Treasury bonds - is a curse. Growing demand for dollars as a reserve asset can only be supplied by persistent US current account deficits.

Contrary to what one might expect, he argues that this actually...