BetaONE will rise again! - The World's Second Wealthiest Person

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Saturday March 6, 3:41 pm ET
By Philip Klein

NEW YORK, March 6 (Reuters) - Warren Buffett (News) , the world's second-richest person, has a $12 billion bet against the United States.
Buffett said on Saturday in an annual letter to shareholders of his Berkshire Hathaway Inc. (NYSE:BRKa - News) holding company that he began investing in foreign currency for the first time in 2002 and expanded his positions in 2003.

By the end of 2003, Buffett's Berkshire held foreign exchange contracts valued at $12 billion that were spread among five unspecified currencies, he said in the letter released on his company's Web site.

He said Berkshire also owned $1 billion of Euro-denominated junk bonds

Buffett, who still has the bulk of his assets in the United States, bought into the foreign currency as the U.S. trade deficit swelled and enjoyed large investment gains as the dollar continued to weaken.

"As an American, I hope there is a benign ending to this problem," Buffett wrote, referring of the trade deficit and weaker dollar. He said, however, the impact could reach "well beyond currency markets."

One Berkshire shareholder said the move was an about-face for Buffett.

"I've attended the annual meeting for well over the past 15 years and every year until this year when asked about the dollar or foreign currency, Berkshire's basically said, 'You don't make money betting against the United States of America,'" said Tom Russo, a partner at Gardner, Russo & Gardner, which owns about 1,000 Berkshire shares. "Something must have really scared him."

In 2003, the investments in foreign exchange contracts contributed $536 million to Berkshire's profit after taxes.

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http://biz.yahoo.com/rf/040306/financial_buffet_dollar_1.html