May 3 (Bloomberg) -- Billionaire Warren Buffett is increasing his bet against the U.S. dollar and seeking acquisitions because he sees no bargains in U.S. stocks and wants to ``rapidly deploy'' Berkshire Hathaway Inc.'s $36 billion in cash.

``Our hope is we can deploy the money in businesses that are just as good as the ones we have,'' Buffett, 73, told a crowd of 19,500 people this weekend at Berkshire's annual shareholder meeting near its headquarters in Omaha, Nebraska. ``We think the odds are good that we will.''

Buffett, Berkshire's chairman, said the U.S. Federal Reserve may be keeping interest rates too low and the trade deficit is swelling, hurting the dollar even as the U.S. economy expands. Buffett this weekend said he increased his investment in foreign currencies by ``more than a little bit'' this year from $12 billion at year-end.

``We think that over time that the dollar is likely to decline in value against some of the major currencies,'' Buffett, the world's second-richest man, said in an interview before the annual meeting.

Charles Munger, Berkshire's vice chairman and Buffett's business partner, asked investors to be patient as the company considers acquisitions and other ways to use its cash.

``Don't get too fretful,'' Munger, 80, said. ``Patience is part of the game.''

Patience Rewarded

Some investors agreed with Munger.

``I'm extremely confident that they will find something to do with that money,'' said Thomas Russo, a partner at Gardner, Russo & Gardner in Lancaster, Pennsylvania, which manages more than $1 billion and has about a quarter of its funds in Berkshire stock. ``Patience is very much rewarded. The best acquisitions will come about from some sort of shock.'' This was Russo's 17th Berkshire meeting.

The foreign currency investments don't signal a greater focus by Berkshire on overseas acquisitions, Buffett said. He has doubled his money to about $1 billion by investing in Hong Kong- listed PetroChina Co. He met earlier this year with foreign Berkshire holders for the first time.

``We've had no luck in Germany, the U.K. or any other country with someone picking up the phone and saying that `I have a business that requires a lot of capital and would you be interested in acquiring us.' They know the name but it doesn't jump out of their mind like it does in the United States.''

Berkshire Shares

Shares of Berkshire, which owns energy, aviation, paint and carpet companies, have increased 33 percent in the past year and risen in all but three of the past 16 years. They fell $110 to $93,390 Friday in New York Stock Exchange composite trading.

Buffett owns about 37 percent of Berkshire's Class A shares, giving him a personal fortune valued at about $44.5 billion. Bill Gates, chairman of Microsoft Corp., is the world's richest person, according to Forbes magazine.

Below-investment-grade, or junk, bonds are another market where bargains have disappeared, Buffett said in an interview. Berkshire has sold some of the more than $7 billion of the high- yield, high-risk bonds he bought in 2002, Buffett said.

``Junk bonds are more than fully priced,'' Buffett said. ``It's gone from one extreme to another in a very, very short period of time. It's almost miraculous.''

Ice Cream, Insurance

Under Buffett, Berkshire has made more than 27 acquisitions in the past six years, including $590 million for ice-cream chain International Dairy Queen Inc. and $18 billion in 1998 for reinsurance seller General Re Corp.

During the last four decades, Buffett has transformed Berkshire from a failing textile manufacturer into a $143-billion holding company by buying out-of-favor securities and businesses on the cheap. Admirers and shareholders travel to Berkshire's annual meetings to hear Buffett, sometimes referred to as the Sage of Omaha, give his opinions about investing and attend company cocktail parties, barbecues and shopping trips.

The foreign exchange purchases are Buffett's biggest investment in the last two years. Buffett started betting against the dollar in 2002 on concern that the U.S. trade deficit would erode the value of the currency. The dollar has dropped about 6 percent against the euro in the past 12 months.

Buffett said the U.S. Federal Reserve probably should raise interest rates as the economy and inflation pick up.

``They've perhaps been a little slow in terms of moving up because the economy has heated up considerably,'' he said. ``People are passing along price increases. It gets into housing. Housing doesn't get into the CPI much, but it gets into people's pockets. You get feedback effects with labor costs, and a ball gets rolling that is hard to stop.''

Buffett said he has become an economic adviser to Democratic presidential contender John Kerry. He said President George W. Bush's tax cuts are ``tilted toward the rich.

``I support John Kerry,'' Buffett said. ``I've got way more money in my pocket because of the tax change and I don't think it's a good idea.''

To contact the reporter on this story: David Plumb in New York at dplumb@bloomberg.net.

Last Updated: May 3, 2004 01:06 EDT