Since President-elect Donald Trump announced his intent to acquire Greenland from Denmark, the Danish currency, the krone, has been devaluing against the U.S. dollar. According to data from OANDA, the price of one US dollar (USD) was 7.22722 krone (DKK) on 9 January. The currency continued to fall against the US dollar to a price of DKK7.23974 for one USD on 10 January. Today, USD is priced at DKK7.26005.
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Mr. Trump wants to expand the influence and security of the American State by increasing the level of occupation in Greenland. Americans should be reminded that the United States has maintained a military presence in Greenland since 1941.
From a statist and protectionist perspective, expansion is the goal of a nation-state, part of what I call the Drew Triple-E Maxim: To extract. To expend. To expand.
Mr. Trump, in his own boorish way, understands this. He is doing nothing that other leaders of nation-states before him have not attempted to do. Question is, can he do it?
Politically, he has to make the sell to the American people. Foreign policy is something people feel detached from. If actions overseas have nothing to do with feeding my family, then why should I care? The Trump card? (I know. Cheesy.) He can tie the public to the issue by arguing national security and natural resources.
On the national security front, Greenland is located between the U.S., Europe, and Russia. Its expanding Northern Sea route, expanding because along with melting ice comes an opening of sea lanes, can accommodate the movement of more goods from East Asia to Western Europe and Western Asia at relatively shorter distances. For example, this route is shorter than the route through the Suez Canal.
Unchallenged access by China and Russia to these routes pose a competitive threat to America’s economic security. The question Mr. Trump is asking is whether China or Russia should be allowed to make a dollar while riding through my backyard?
The national security challenge is compounded by the current lack of access by the United States to Greenland’s untapped natural resources. Greenland has oil, natural gas, lithium, graphite, and neodymium; all the nutrition a growing economy needs to get bigger and stronger.
I would expect Mr. Trump to argue that having access to and control of the Northern Sea route means the United States can exploit that shorter route when moving American products to Europe and Asia. If you turn the Northern Sea route into the American Northern Sea route (Mind you. He wants to rename the Gulf of Mexico the Gulf of America), the US creates territorial waters entry to which it would regulate. Determining the type and volume of traffic entering that sea lane only adds to America’s security, Mr. Trump may argue.
I expect Mr Trump to also argue that controlling access to the minerals I mentioned above can be translated into jobs. More inputs available for extraction may lead to more production and distribution of goods. Facilities will have to be constructed to produce and distribute product and that means more labor being put to work.
The currency problem that Mr. Trump may have to address in the longer run is the impact on the USD. He is a proponent of a weaker dollar, but adding to America’s productivity may have the opposite effect of driving up demand for the dollar.
One thing at a time, I suppose.
Alton Drew
11 January 2025
Show notes
https://news.yahoo.com/news/historic-importance-greenland-us-national-150217989.html?form=MG0AV3
https://news.yahoo.com/news/us-says-no-plans-increase-093644777.html?form=MG0AV3
https://www.britannica.com/topic/executive-agreement
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