Maybe Warren Buffett is right that trade deficits will sink the U.S. currency. There are a lot of ways to make this bet.

The dollar is weak, definitely not good news if you are traveling overseas. That Hermes scarf bought in Paris costs an American 7% more than it did Jan. 1. The euro is hovering at 52-week highs. Investors, however, can ride this trend to their advantage. The ever-canny Warren Buffett has taken huge bets against the dollar, both by shorting the currency in futures contracts and by buying foreign stocks. For a while last year the antidollar play looked dumb, but this year it looks clever.

The case made by the dollar bears hangs on our balance-of-payments deficit ($809 billion over the last four quarters). When foreigners who are now stockpiling dollar assets like Treasury notes tire of them, so goes the argument, they will unload dollars, and dollars will sink like stones in the currency markets. Emerging Asian economies are under pressure from trade partners to allow their currencies to appreciate. The incoming Treasury secretary, Henry Paulson, seems to embrace a weaker dollar, to make American goods more competitive abroad.

You don’t have to be a billionaire to speculate against our currency. Frank H. Randall Jr. 77, invests to preserve something for his grandchildren. He has put $80,000, or 10% of his portfolio, into foreign currencies. Says Randall, a former electronics engineer and two-term Colorado state legislator, “The U.S. is printing money at the speed of light, and it’s scary. I worry more about the risk our country is taking than the risk I am taking.”

Randall has divided his antidollar portfolio among certificates of deposit denominated in the Thailand baht, in the Norwegian krone and in a blend of currencies (the euro, the British pound and the Australian and New Zealand dollars). He opened his account in March, and since April this collection of CDs has delivered Randall a 6.6% return, with 1.9% coming from interest and the rest from an appreciation in the value of the foreign currencies against the U.S. dollar.

EverBank Financial of Jacksonville, Fla. offers depositors CDs in 15 currencies and overnight accounts in 18. Don’t expect a handsome interest rate. Five of the most promising foreign CDs, say EverBank officials, have interest rates below the 5% you can get on a one-year CD in the U.S. In fact, the Swiss CD offers no interest because that small, perennially neutral European nation, a traditional haven of capital and an icon of stability, is seen as the epitome of safety.

EverBank has gathered up $900 million for its foreign currency accounts, which are protected by deposit insurance. EverBank’s spread of 0.75% is less than one percentage point from the midpoint of the institutional bid/ask spread for your purchase and selling prices.

Tax treatment: Your net interest is taxable as ordinary income. Gains or losses on converting the CD back into dollars are capital gains and losses, eligible for the 15% federal rate if the CD is held for at least a year and a day. (EverBank’s one-year CD does qualify as long term.)

Charles Butler, president of EverBank World Markets, is a fan of the Swiss franc. It has climbed 5% against the dollar since April and historically does well during dollar panic: It was up 20% in 2002, a post-Sept. 11 reaction. Like the European Central Bank. the Swiss central bank is raising rates. That could damage the Swiss franc value of a long-term CD but presumably will help prop up the value of the franc on the currency exchanges.

The Swedish krona one-year CD carries a yield of 0.75%. But inflation in Sweden is only 1.6%, and the central bank is determined to keep it low.

If you want a speculative play, buy Mexican pesos for a yield of 4.8%, at some risk that this historically shaky currency will suffer a collapse before you can get your dollars back. The peso was the subject of large devaluations in 1976 and 1994. One worry: What will happen if and when oil prices drop, says David Watt, senior economist at BMO Capital Markets. He expects the peso to rise 2% against the dollar this year but to recede again in 2007, along with oil.

Aside from certificates of deposit, there are several mutual funds that track multiple currencies. They run up annual expenses of $1.19 to $1.30 per $100 of assets. Six country-specific exchange-traded funds that Rydex just launched in late June will have expenses of 0.4%. Rydex has had a euro ETF in place since December 2005.

For those seeking Asian exposure, an alternative is currency notes, trading like a preferred stock on the American Exchange, from Citigroup Global Markets Holdings. Called principal-protected notes, these things hold a melange of the South Korean won, Thai baht, Indian rupee and Taiwan dollar.

If you have a lot of bucks, consider holding currency futures on the Chicago Mercantile Exchange. The British pound contract, for example, is a bet on $114,000 worth of the currency. To avoid the risk of a margin call, deposit that entire sum in your futures account in the form of Treasury bills. You collect 5% interest on the bills plus a gain or loss on the pounds. The round-trip commission on a single contract might be $7.20; the bid/ask spread another $12.50. Another broker quoted $33 for the commission plus the bid/ask spread. Gains on the future are taxed at a blended rate of a maximum 23%, says Robert A. Green, a CPA, in New York, specializing in taxes for traders and hedge funds. In selecting a maturity, you have a tradeoff between liquidity (lots of contracts outstanding) and the cost of rolling over frequently. For the best liquidity, David Schulz of the Chicago Merc recommends selecting a maturity three months out.

Beware of currency charlatans. John Bartowski, a high school principal from Moses Lake, Wash. invested $5,000 with something called Gibraltar Monetary of Boca Raton, Fla.; it claimed he could earn up to 300% from the euro. Bartowski basically lost it all, as did 260 of its 273 investors. Since 2001 the Commodity Futures Trading Commission has won $300 million in restitution and civil penalties from 90 enforcement actions brought against hundreds of firms, owners and employees for defrauding 27,000 customers in forex schemes.

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