French President Nicolas Sarkozy said that the dollar cannot remain the world’s only reserve currency as America loses its global dominance.

“The political and economic reality of a multipolar world will have to find sooner or later a translation on the monetary level,” said Sarkozy to foreign ambassadors at a reception in Elysee Palace last Wednesday. “A multipolar world can’t count upon one currency only.”

Meanwhile, financial experts are also expressing concern about the dollar’s position. The Wall Street Journal reports:

In a new twist to an old refrain among economists, who have long worried about the effects of growing U.S. debt, they say that the huge liabilities the U.S. is taking on to dig its way out of crisis could ultimately undermine faith in the dollar.”There has been a lot of disappointment with the way the U.S. credit crisis was handled,” says Claire Dissaux, managing director of global economics and strategy for Millennium Global Investments Ltd., a London investment firm specializing in currencies. “The dollar’s loss of influence is a steady and long-term trend.”

Curtis Mewbourne, a portfolio manager at bond investment firm Pimco, said, “Investors should consider whether it makes sense to take advantage of any periods of U.S. dollar strength to diversify their currency exposure.”

Last Tuesday, the U.S. government announced that the budget deficit would reach $9 trillion over the next 10 years—$2 trillion more than previous projections. “That’s going to be negative for the dollar,” said Adam Boyton, a currency analyst at Deutsche Bank AG. Seeing the U.S. borrow so much will not increase investors’ faith in the dollar.

It is against this backdrop that world leaders are increasingly discussing the end of the dollar as the world’s reserve currency. At the G-8 meeting in Italy last month, Sarkozy joined Russia and China in calling for the end of the dollar as the world’s reserve currency.

With France, Russia and China calling for the end of the dollar’s dominance, and India, a strong U.S. ally, joining the chorus, 25 percent of the G-8 countries and the two largest developing economies in the world are all trying to reduce the importance of the U.S. dollar. This kind of pressure can’t be ignored for long.

Developing economies, such as China and India, still remain dependent on the dollar. The International Monetary Fund (imf) said the dollar’s share of global foreign exchange reserves rose to 65 percent in the first three months of this year, the highest since 2007. Alternatives are now presenting themselves, however. Russia, China, India and Brazil announced in June they would purchase imf bonds as an alternative to U.S. bonds.

No doubt these same nations will eagerly look for more alternatives. A replacement for the debt-ridden dollar will appear soon. For more on what is coming, see our article “World Prepares to Dump the Dollar.”