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CIARAN RYAN: We’re talking today – of all things – about Greenland, for reasons that have become increasingly relevant and pressing to the wider world. Greenland attracts US attention mainly for its strategic and geopolitical value: its location, defence infrastructure, Arctic shipping routes, and potential underground resources.
These things are [likely] more important to the US, I guess, than the small population or the economy of Greenland.
Where is this all [heading]? What geopolitical risks are at play here, and how will it end? To answer this, we’re joined by Adriaan Pask, chief investment officer at PSG Wealth. Hi Adriaan, good to talk to you again.
ADRIAAN PASK: Hi Ciaran.
CIARAN RYAN: What are you reading on this, and what [exactly] is going on in Greenland? Why is it suddenly attracting the attention of the US?
ADRIAAN PASK: I must say, I find this a very interesting topic because I think the world we live in today was functioning fairly normally until geopolitics intensified and multiple wars broke out.
Geopolitics is becoming an increasingly important factor, especially in the international investment environment, because the consequences are often large-scale and far-reaching.
If you start to look at the mechanics of where the deal comes from – the scale of it and the likely implications – it becomes even more fascinating.
So when you asked what is attracting the US to Greenland in the first place, and how it’s even possible for them to entertain the idea of purchasing a country outright, you’re right: it is massive in scale. Greenland is a two-million-square-kilometre island with roughly 55 000 residents. That alone makes it an intriguing case study.
To put it in perspective, comparing Greenland with the US – with 340 million people and a much larger landmass – Greenland is about the size of the three largest US states combined. It’s a striking mismatch – or proposed match – which is central to the discussion.
A key element often overlooked by analysts is Greenland’s strategic importance, particularly its potential to detect missile launches early from areas like Russia. That remains a major consideration in any US interest.
Beyond defence, there’s also discussion around new shipping routes and untapped resources. But it’s important to understand the potential payoff timelines.
Strategic defence benefits can be realised relatively quickly – by deploying military personnel and building the necessary infrastructure for a larger base. Other initiatives take significantly longer.
Shipping routes, for instance, are emerging as Arctic ice melts, but they won’t be fully operational for decades.
Current projections suggest these routes could commence in about 10 years and become commercially viable only after 20 years of development.
As for commodities, Greenland has been hyped as a resource-rich territory. In reality, confirmed resources are modest: there are only two active mines on the island, with the rest being potential mineral and rare-earth deposits. Exploration and mining would take decades – estimates suggest 20 to 40 years before any economic benefits materialise.
Given all of this, from [US President Donald] Trump’s perspective, the strategic defence angle is likely the most immediate and compelling driver of interest.
CIARAN RYAN: It’s interesting that this is obviously a long-term play here, and Trump is very interested in cementing his legacy as the person who expanded the boundaries of the United States.
I guess this is not the first time that the US has done something like this. The Louisiana Purchase – that goes back 150 years or more, when the US actually bought Louisiana from France for a fairly sizeable sum of money at the time.
And then Russia also sold Alaska to the US not long after that. So there is precedent for this.
The amounts of money paid, in today’s terms, don’t seem very much. But what do you think the longer-term thinking is here? Is this a question of Trump’s legacy, or is it a resource grab and defence [motivation], because the world is entering into quite a dangerous geopolitical phase?
ADRIAAN PASK: I think, like most things, it’s never just one factor. There’s certainly an element of strategic defence, as well as concerns about broader geopolitical tensions and being prepared for what may come.
Superpowers to the east are rising, and the current dominant superpower is likely to be challenged in the coming decades, if not sooner.
Naturally, that triggers a cascade of other consequences.
A lot has been said about the US being in a strong financial position, holding the dominant global role, and benefitting from the reserve currency – advantages that aren’t easily relinquished.
Then there are the more personal elements you mentioned – legacy, ego, and other factors that might influence Trump’s motivations.
It’s anyone’s guess how this will play out, how far he will push, and how aggressively he will pursue it.
For the rest of us who must deal with the consequences, there’s at least a safety component from a commercial and global perspective: early detection of potential conflict can help manage risk.
But, of course, such capabilities can also be misused, potentially escalating tensions and provoking conflicts rather than preventing them.
Ultimately, it’s a highly complex area of debate, with strategic, political, and human dimensions all intertwined.
CIARAN RYAN: Yes, there are a few moving parts here. You’ve got Denmark on the one hand, you’ve got the US, and you’ve got the people of Greenland themselves – the 50 000 people who live there. From what I have seen, they’re not entirely enthusiastic about leaving the protection of Denmark and going over to the US.
But where do we stand with this? Because it was quite hostile. At one point there was even talk of maybe military boots on the ground in Greenland.
Are they now talking a deal, or is this thing going to disappear in your opinion and no longer be part of the discussion?
ADRIAAN PASK: No, I think it’s still very much in this sphere. The various options under discussion have flip-flopped a bit. Initially, Trump seemed to be hinting at a ‘carrot or stick’ approach, but after pushback from different parties, he abandoned the idea of using force. That’s certainly a huge relief.
However, there are still numerous steps that would need to happen for this deal to move forward. You mentioned that the people of Greenland aren’t particularly happy with how this is being approached.
Reports suggested Trump offered between $10 000 and $100 000 per citizen, but he never confirmed any figure.
Interestingly, he expressed interest explicitly but never made a financial commitment. Those numbers actually came from senior government officials who leaked them.
The thinking behind this is that Greenland’s population would need to be on board, as several steps depend on public approval.
Greenlandic voters would need to approve any change in status through a referendum, followed by Greenland’s parliament authorising and ratifying any agreement affecting sovereignty.
Only after that would Denmark’s government need to consent to any territorial changes.
On the US side, there are further practicalities. The deal would still need a two-thirds majority in the Senate to ratify it – and, given the country’s financial situation, Congress would have to approve the funding.
It’s easy to see why some prior deals in history ultimately amounted to nothing – they were simply too complex and expensive to execute.
CIARAN RYAN: What happens then if they do settle on an amount? The figure that’s been floated – around $700 billion – sounds like a huge amount of money. But maybe, if it goes through, 100 or 200 years from now it might seem like chump change and would get paid.
Would it be the Danish government? Would it be the people of Greenland?
I guess there is an investment issue here, which is potentially huge – that if this deal does go through or there’s any more stick than carrot, if it starts getting a little bit threatening, a lot of countries around the world would be fairly nervous. So the point I’m getting at is I see heightened geopolitical risk as a result of this.
ADRIAAN PASK: Yes, absolutely. We shouldn’t forget that at the same time Trump is not being very pro-Nato [North Atlantic Treaty Organisation] – to say the least. And Denmark is actually a founding member of Nato. So there are big philosophical changes there, you would assume.
But in terms of where the money actually comes and [downstream consequences], I think it’s good to contextualise the GDPs [gross domestic product] of the various parties.
Greenland’s GDP is tiny; it’s about $3 billion per annum. Denmark’s is around $500 billion, and the US’s is $29 trillion.
Obviously, it could be a big deal for Greenland or Denmark, but not so much for the US. If you look at some of the historical figures that have been mentioned, the last one was probably around 1946. There was actually a formal offer made by the US for Greenland back then, and that offer was $100 million in gold. Funny enough, we know what the gold price has done since, and if you do the calculation, that’s $1.7 billion today.
But if we use a conservative estimate and, say, everybody agrees and they offer $500 billion, which is a super-conservative estimate by the way, that’s the entire GDP of Denmark that they gain.
And also what’s interesting is that there are annual grant payments Denmark [makes to] Greenland, obviously in support of infrastructure and other things. Those payments are roughly $750?million per year.
But the key point is the spirit of ‘We are connected at the hip’. If the payment goes to Denmark, Greenland would naturally expect something in return, similar to the existing grant. So there could be a payment directly to Greenland, which could be quite substantial relative to their GDP.
For the US, however, we’re talking about only 1% or 2% of GDP – so it’s not necessarily meaningful in the broader economic context.
But if a permanent payment were required and Congress approved it, that would essentially represent a year’s worth of GDP growth spent without any corresponding fiscal gain. From a financial perspective, it’s a significant capital outlay that must ultimately be covered.
Moreover, Denmark would no longer be responsible for ongoing maintenance or development payments for Greenland. Everything – from building new bases to supporting infrastructure – would become the US’s responsibility, adding further cost.
It all raises the question of whether US finances are in a position to support this long-term commitment. Can they truly think that far ahead?
This approach is similar to what we often see from the Chinese, who typically plan and make decisions with a very long-term horizon – sometimes decades into the future – focusing on strategic positioning, infrastructure, and influence rather than immediate gains.
The US, by contrast, usually operates within the shorter span of presidential terms, typically four to eight years, so long-term bets beyond that horizon are rare.
That’s why it would be unusual for the US to make what is essentially a 40-year investment, hoping to see financial or strategic returns over the next four decades.
Let’s see how that plays out. To my mind, it’s just too complicated. It demands too much from the parties on the ground, particularly in a political system where short-term thinking dominates.
The Greenlanders aren’t happy, Denmark isn’t happy – it feels like there are simply too many obstacles for the deal to succeed. But, as they say, never say never. For now, it seems like a bit of a dreamland – certainly not Greenland.
CIARAN RYAN: Well, it’s a fascinating story, and no doubt we’re going to talk about this more as the months go by.
Thanks very much for joining us. Adriaan Pask is chief investment officer at PSG Wealth.
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