Of Course Donald Trump Wants The US To Buy Greenland

Sometimes, you just know.

Which is why, back in May, when Donald Trump was busy perpetuating the trade war with China and threatening to slap across-the-board-tariffs on Mexico, we tweeted the following humorous assessment, while idly speculating about the president’s “strategy”:

Trump is gonna try to convince the Fed to cut rates by being insane. Next he'll just fire a cruise missile at Greenland and see if that's enough to light a fire under Powell

— Heisenberg Report (@heisenbergrpt) May 31, 2019

Fast forward two and a half months, and there is no question that Trump has, in fact, deliberately injected uncertainty into the trade situation in an effort to engineer rate cuts.

In fact, that is now the widely-accepted interpretation of the president’s decision to break the Osaka trade truce less than 24 hours after Jerome Powell’s disappointing post-meeting press conference last month.

All that was missing was Trump firing a cruise missile at Greenland.

We say “was” because on Thursday evening, The Wall Street Journal reported that Trump does indeed have Greenland on his mind – only not as a military target, but rather as an acquisition opportunity.

“The idea of the US purchasing Greenland has captured the former real-estate developer’s imagination, according to people familiar with the deliberations, who said Trump has, with varying degrees of seriousness, repeatedly expressed interest in buying the ice-covered autonomous Danish territory between the North Atlantic and Arctic oceans”, the Journal says, in a fairly lengthy piece, complete with majestic visuals of Trump’s would-be conquest.

The Journal goes on to say that Trump has, during meetings and “dinners”, quizzed advisers on the prospect of buying Greenland for its “abundant resources and geopolitical importance”.

Trump, the sources said, has actually instructed the White House counsel to explore the possibility.

Aides and advisors are apparently split on how seriously to take the president. Some view the idea as a strategic opportunity well worth examining, while others think it’s just insane (the Journal doesn’t say that but that’s the gist of it).

Of course, Greenland may not be for sale, seeing as how it’s technically part of Denmark, so it’s not exactly like Trump can just go there and buy it, although he is scheduled to make his first trip to the island early next month. “The visit is unrelated”, the Journal’s sources promised.

Danish officials didn’t immediately respond to the Journal’s request for comment. Presumably they needed at least 24 hours to process the question, and another 12 to stop laughing.

This isn’t quite as ridiculous as it sounds, though. Or, actually, yes it is. But that doesn’t mean there isn’t at least some context to be had. Here’s WSJ:

A decades-old defense treaty between Denmark and the U.S. gives the U.S. military virtually unlimited rights in Greenland at America’s northernmost base, Thule Air Base. Located 750 miles north of the Arctic Circle, it includes a radar station that is part of a U.S. ballistic missile early-warning system. The base is also used by the U.S. Air Force Space Command and the North American Aerospace Defense Command.

The U.S. has sought to derail Chinese efforts to gain an economic foothold in Greenland. The Pentagon worked successfully in 2018 to block China from financing three airports on the island.

In addition to that, the US has tried to buy Greenland before, specifically in 1946 when Truman offered Denmark $100 million for it. Before that, the State Department tried to buy it as a package deal with Iceland in 1867.

See there? Trump is just tying up loose ends!

According to one source, Trump was attending a dinner last spring when he heard Denmark was having problems coming up with the hundreds of millions in subsidies it pays out to the territory each year. When somebody (probably jokingly) suggested Trump buy it, he naturally jumped at the opportunity. “What do you guys think about that?” he reportedly asked everyone in the room, “Do you think it would work?”

No. Probably not. As the Journal rather dryly notes, “it is unclear how the US would go about acquiring Greenland even if the effort were serious”.

One idea would be to just issue more bonds. After all, going further into debt for the purpose of acquiring a giant, frozen island with a vague claim on strategic importance can’t possibly be a worse idea than issuing mountains of debt to fund tax cuts for billionaires and corporations. Besides, now that Treasury yields have a date with zero, there’s never been a better time to lever up.

Then again, the entire Danish curve is negative, so maybe Denmark should just issue a bunch of debt and use the proceeds to buy America. After all, the country sold $260 million of 10-year bonds earlier this summer at minus 0.32%.