August 22, 2019
Is Trump’s Idea to Buy Greenland Really so Crazy?
Buck Sexton, Executive Editor
Originally it sounded like a joke.
This week, media reports emerged that President Donald Trump had been speaking to senior White House advisers about buying Greenland, a frigid Danish protectorate and the largest island in the world.
This immediately spawned all manner of humorous memes and other commentary online. The leader of the free world – who also happens to be a real estate magnate – was thinking about a land deal involving a country best known for its glaciers and sparse population.
Turns out, Trump wasn’t kidding.
To the shock of many, the president confirmed his interest in acquiring the massive frozen island. He wanted to approach the subject with the Danish government, who provide national security and diplomatic protection to the otherwise autonomous island.
Once this news broke, Danish Prime Minister Mette Frederiksen tersely told a newspaper, “Greenland is not for sale.” In response, Trump canceled a scheduled visit with Denmark’s Queen Margrethe II. In case anyone was wondering if this was really the reason, here’s what the President tweeted:
Greenland hasn’t seen this much interest since a bunch of 10th century Vikings were blown off course and became the first westerners to set foot on the island.
Of course, much of the resulting media coverage has been to trash the president for what we are told is an unthinkable proposition.
But why, exactly, should we think that purchasing Greenland is such an absurd idea?
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After all, America has a long – and in retrospect, wildly successful – history of paying cash for vast tracts of land, including the Louisiana Purchase from France in 1803 to the great deal we got from Russia for the Alaska Purchase in 1867.
From an international law perspective, Denmark could choose to sell Greenland, and the U.S. could take its people as permanent residents under the condition that Greenlanders held some form of referendum and accepted the change. There’s no other legal or ethical roadblock to making Greenland a U.S. protectorate, something akin to Guam or Samoa (just a lot bigger and colder).
Greenland’s entire population is around 56,000 – less than say, Schenectady, New York. Its national economic output is under $3 billion a year, and its single biggest industry is fishing. Outside of its capital, Nuuk, there is very little infrastructure of any kind, although America has an Air Force base on the northwest portion of the island.
Given its harsh climate and lack of inhabitants, maybe a better question is, “Would America want Greenland?”
The short answer – assuming a reasonable price – is absolutely.
Greenland is a territory with many strategic benefits. It has abundant natural resources like zinc, copper, gold, coal, and uranium. In fact, an Australian mining company called “Greenland Minerals” (with a large chunk of Chinese ownership) is already mining for rare earths minerals there. Greenland could also be helpful for projecting U.S. interests in the Arctic circle – an increasingly fierce realm of competition between America and Russia, among others.
Greenland is also likely to get much more valuable over time. If the predictions about a coming global fresh water crisis are correct (estimates are that one-quarter of the world’s population face running out of potable water) having access to the second-largest source of fresh water in the world – the Greenlandic ice shelf – seems like a good idea.
Climate change also means that more of the country will emerge from under glaciers in the decades ahead. Not since Viking explorer Erik the Red named it “Greenland” to encourage settlement has there been a better time to establish claim to the island.
So, could we get it at a good price?
Trump claims that it costs Denmark $700 million a year to support Greenland. Turns out it’s more like $740 million, as it can only generate half of its annual budget. The world’s largest island is a welfare case. Maybe the Danes, who strain under the cost of their own government programs, would be happy to offload some freeloaders. We won’t know if we don’t ask.
Will Donald Trump pull off his most daring real estate transaction yet? One that could arguably be the largest transfer of land for cash in the history of the modern world.
But even though Greenland is very unlikely to become the 51st state, it has led to one of Trump’s greatest tweets of all time:
Now here’s what we’re reading…
The nation failed to meet a 2-billion-euro target ($2.2 billion) for the auction of notes maturing in 2050, signaling that negative yields across Europe may finally be taking their toll on demand. It’s another sign that the global bond rally may be coming to a halt now that more than $16 trillion of securities have negative yields.
“There was absolutely frustration,” He said. “We were facing what we believed was a public health crisis that needed to be addressed and we had what we thought was an agreement with the surgeon general to do a thing. We produced that thing … and then it never saw the light of day.”
Economists consider the spread between the 10-year and the 2-year of great importance because inversions of that part of the curve have preceded every recession over the past 50 years. The last five 2-10 inversions have eventually led to recessions. Bond yields move inversely to their prices.
And let us know what you’re reading at [email protected].
Executive Editor, American Consequences
With P.J. O’Rourke and the Editorial Staff
August 22, 2019