LET’S BUY GREENLAND. Trump’s folly may not seem as crazy as it appears on the surface. By Todd Horwitz, Bubba Trading.

 


March 30, 1867 the United States Secretary of State William Seward reached an agreement with Russia to purchase Alaska from The Czar for a price of $7.2 million dollars. Critics of the deal referred to it as “Seward’s Folly” and claimed that it was the worst scam in the history of the Northern hemisphere. Strangely enough when congress voted on the deal on April 9, 1867 it passed in the senate by a vote of 37-2 and the house approved it by 113-43 so someone else in the Federal government felt it must have also been a good deal.

Of course, when gold was discovered in 1895 in the Klondike area, ‘Seward’s Follow” was quickly forgotten. What was one of the worst deals of all time became one of the best. Since then Alaska has become one of the greatest natural resource areas of the world and a vital asset to the U.S. economy. Now we have a new potential folly which will not pass the house and senate with such ease and that is the purchase of Greenland form Denmark.

Greenland is a sparsely populated island of 50,000 people located North East of the US which is rich in natural resources. It is owned by Denmark and this would not be the first time that the U.S. has tried to purchase the island. In 1946, President Harry Truman offered to buy the island for $100,000,000 dollars but the Danes refused to sell it.

Trumps folly may not seem as crazy as it appears on the surface. Although the citizens of Greenland are perfectly satisfied with their current ties to Europe both culturally and physically, there may be a political reason behind the proposal, China. With their ambitions marked by taking islands and developing them into military bases, they might see owning some land in Greenland close to the American coast as a pretty good idea. Influence in the Western hemisphere can seem like a very good idea for China and who knows, Trumps folly although a long-shot to go through might look different 100 years from now!

Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets and Political Commentary
 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.