Recently, President Trump floated the idea of buying Greenland from Denmark. The Danish prime minister called the idea “absurd.” But would the Danish people consider a fair offer?
In 1946 the Danes turned down a proposal by Harry Truman for the US to buy the island for $100 million. If invested properly, the sum would be worth $163 billion today. Clearly, we would have to pay a lot more than just a few hundred billion dollars for the world’s largest island.
What would be a fair price to offer? Businesses use comparables for setting prices. In this instance, the most relevant comp is Seward’s Folly–the purchase of Alaska from Russia for $7.2 million in gold. While the cost/benefit of the purchase has been questioned, it is generally agreed to have been a great deal for the US. Interestingly, one reason why Secretary Seward wanted to purchase Alaska was to surround Canada and force it to become part of the US. Let’s assume, however, that Mr. Trump does not want to make Canada our 51st state by buying Greenland.
Is the current value of Alaska a reasonable comp? The answer is–yes. One reason why is that Greenland is one-third larger than Alaska. Consider all the natural resources that will be found there. Of course, 80% of Greenland is covered by ice. But that’s good. Because of climate change, the ice sheet is melting at an increasing rate. Soon its resources will be available to harvest. In addition, think of all the pure, healthy, millions-of-years-old water that could be gathered, bottled, and sold. The brand could be called Pur Glacier (Pure Glacier). So, let’s assume that the value of Alaska can be used as a comparable.
How much is Alaska worth? In 2012, a writer for the Washington Post calculated that the US could sell Alaska for $5 trillion in order to reduce the national debt. Presciently, he suggested that real estate mogul Donald Trump might be willing to make the purchase. Since 2012, Alaska’s value will have doubled to $10 trillion because of inflation and the state’s increased strategic importance. President Trump has already argued that Greenland is strategically important to the US as a check against Russia and China. Both nations are already casting covetous eyes on the arctic region in order to gain its resources. A troubling thought is that if Greenland were put up for sale, a bidding war could result. Perhaps the US should quickly and quietly pay Denmark $10 trillion for the island.
Would the Danes accept a $10 trillion offer? If the funds were distributed equally among the 5.7 million Danes, each would receive about $1.8 million. This huge windfall would make it hard for the Danes to say neg. Thus, Mr. Trump could have his island.
But wait! To get the money, every US citizen would have to pay over $30,000 to Uncle Sam for the purchase. Clearly, this iceberg won’t float.
In sum, both leaders are wrong. On the one hand, the idea of Denmark selling Greenland is not absurd and makes sense–if the price is right. On the other hand, getting US taxpayers to cough up $10 trillion in order to sway Denmark is absurd. The purchase would become “Trump’s Folly.”
How then can we fulfill Mr. Trump’s goal of owning Greenland? The answer–INVADE! Certainly, an invasion would cost less than the $10 trillion price to buy it. It would be an easy win–even easier than the successful invasion of Granada ordered by President Reagan.
Yikes, suddenly I hear Blackhawk choppers. The sound is getting louder. Drat, they’re here. “Hi Sergeant Seal. Sir, the essay is a joke…. I was just kidding”……umpf…..”really”…splat..…”just”…..”kid…….