Only 60,000 people live on the world's largest island
What Greenland Is Rich In
As BBC notes, more than 80% of the island's territory is covered with ice. The population is only about 60,000 people. But there is plenty of fish off the coast, and many useful minerals in the subsoil. And as glaciers melt, extracting resources becomes easier.
Greenland has oil, uranium, and rare earth metals: neodymium, praseodymium, dysprosium, and terbium. They are vital for modern high-tech industries, but more than 70% is mined in China, with which Trump is waging a trade war.
China has also bought up the largest deposits in Africa. And even if it keeps its promise not to restrict supplies to the global market, known reserves will last only a couple of decades.
The United States is the richest country on the planet, a global leader in high technology, and the world's largest oil producer. To maintain these positions, Greenland would be very useful for America.
Why the Pentagon Needs Greenland
The island is located in the strategically important Arctic. The shortest route from Europe to North America lies through Greenland, and geographically it is much closer to the latter, even though it is an autonomous territory of European Denmark.
Strategically, it would be great to buy Greenland, Trump explained his plans. Since the Cold War with the USSR, the United States has had a military base on the island. And the Pentagon would not mind expanding its presence in the Arctic to counter threats from China and Russia.
The same reasoning guided President Harry Truman when he offered $100 million in the post-war year of 1946, when the world was dividing into Western and Soviet spheres of influence: to buy it so that it would not fall to the enemy.
China is nurturing the idea of an Arctic trade route, and last year it was about to build two airports in Greenland – but Denmark convinced the authorities of the autonomy to give both contracts to it.
Russia, for its part, is building up its military power in the Arctic, expanding its northernmost military base, the Arctic Trefoil, on Franz Josef Land. The Nagurskoye airfield located there is almost ready to receive heavy Il-78 aircraft, which are used for in-flight refueling of fighters and bombers.
Why Does Trump Want Greenland?
Trump is a hereditary developer. He has spent his whole life buying land, building houses on it, and selling apartments. But now he is president and promises not to treat Greenland like his favorite island – Manhattan.
However, Trump's personal interests are not limited to money. Buying Greenland would allow him to go down in history alongside Presidents Andrew Johnson and Thomas Jefferson, who bought Alaska and Louisiana for the United States.
The glory of a land collector would surely overshadow the controversial achievements of Trump's presidential career and immortalize him for centuries.
How Much Does Greenland Cost?
Land, especially with people, has not been sold on such a scale for a long time, so it is difficult to determine a market price. But one can estimate.
Jefferson bought Louisiana from the French in the early 19th century for $15 million, and half a century later Johnson bargained Alaska from the Russians for half that price. Truman offered Denmark $100 million in 1946.
Even adjusted for inflation, that money would not buy a house in Manhattan today, let alone an island. It is more reasonable to look at current prices for non-agricultural land in the United States. Louisiana would then cost at least $1 trillion. And given the economic and strategic potential of the Arctic island, the price could be several times higher.
Does Denmark Need the Money?
Trump called Greenland a burden for Denmark. "They are suffering greatly, incurring losses – almost $700 million on its maintenance," he said.
Denmark indeed transfers $640 million a year to Greenland. This is a drop in the ocean: the country lives on $170 billion a year, and subsidies to the distant island do not exceed half a percent of budget expenditures.
Denmark is among the ten richest countries in the world, and its debt is only a third of GDP. It needs money so little that the central bank lends it at 0.05% per annum, and banks are willing to pay people just to take out a mortgage.
Does the United States Have the Money to Buy Greenland?
Unlike Denmark, US debt exceeds the country's GDP. Americans owe more than $22 trillion, and this amount is not decreasing. The country's budget has a hole of $1 trillion a year, and it has to be covered by borrowed funds.
However, the ability to increase this debt is almost limitless for the United States. Since there are almost no profitable and reliable assets left in the world, dollar bonds are in huge demand.
True, Trump would have to get Congress to approve such large-scale spending, and Congress has so far refused to fund even the modest-by-his-standards project of a wall on the border with Mexico.
Will There Be a Sequel?
Denmark is determined. "Greenland is not for sale. Greenland does not belong to Denmark. Greenland belongs to Greenland," Danish Prime Minister Mette Frederiksen responded to Trump's plans and called the idea absurd. "I very much hope that he is not serious."
Trump can only hope for separatists. If freedom-loving Greenlanders want to declare independence – say, by the 300th anniversary of colonization in 2021 – they will be free to sell their homeland to anyone.
In that case, Greenland would instantly turn into an island of millionaires: even at the minimum price of $1 trillion, the sale would bring each resident about $18 million.