Greenland Risk, Market Nerves

We dig into why talk of controlling Greenland jolts markets, how NATO and EU cohesion factor into risk, and why mineral and oil narratives run headlong into cost and time. We weigh realistic outcomes—from free association to sovereign base rights—and what they mean for European equities, oil, and defense plays.

• NATO and EU cohesion risk shaping market sentiment
• Russia’s hybrid tactics raising European vulnerability
• Arctic minerals and hydrocarbons facing high extraction costs
• Realistic paths: free association or sovereign base rights
• Precedents from Micronesia, Cyprus, Guantanamo informing options
• Oil pricing driven by uncertainty, not near-term supply shifts
• Defense exposure favoring drones and sensors over moonshots
• Portfolio stance: cautious Europe allocation versus buy-the-dip tactics
• Timelines and cash flows guiding resource investment decisions

Thanks, listeners. This is a quick take, and as such, we don't have a full knowledge and full ability to determine what the best impact is for investors, but thanks for listening, skeptics, and we look forward to serving you and helping you with your portfolios as we unveil more and more of 2026. Stay safe out there and keep your head on the swivel.

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Chapters

• 0:00 Framing The Greenland Question
• 1:48 NATO, EU, And Russian Leverage
• 4:42 Rhetoric Versus Reality
• 6:42 Minerals, Oil, And Arctic Costs
• 9:16 Ownership Scenarios And Sovereign Bases
• 12:49 Precedents: Micronesia, Cyprus, Guantanamo
• 15:34 Investor Timelines And Resource Lag
• 17:54 Defense Tech, Drones, And Boondoggles
• 19:49 Portfolio Impact And European Exposure

Transcript

Steve Davenport: 0:26

Hello, everyone, and welcome to Skeptics Guide to Investing. Today, Clem and I are here and we were planning on you know going for a walk or doing some reading or but this uh topic of Greenland, the the big piece of uh land at the top of the Arctic Circle, um seems to be the topic that is your and it's causing markets to go down. We can abduct a leader of Venezuela and the markets go up, but when we talk about um an icy passage to the north, it's suddenly uh the world feels like there's risk. So I'm not sure why Greenland and why Greenland is so risky and so involved. Um I I thought it was just a uh a place where we had a base and a place where we could look at the northern lights. Clem, can you tell me why this is so important? Why Greenland?

Clem Miller: 1:24

Well, from uh from a markets perspective, uh focusing on that, uh you know, the thing about Greenland and the U.S. desire to take over Greenland uh is that it impacts potentially the future of NATO and the future of the European Union. And if the NATO alliance, if the European Union, uh if those are weakened substantially by this, uh then it gives uh Russia a greater outlet for being able to uh make mischief, not just in Ukraine, but also in other countries in Europe too. One has to remember that Russia is not only involved in Ukraine right now, but is undertaking hybrid uh operations, warfare operations in the rest of Europe, cutting cables and uh and doing uh some low-level sabotage operations and and violating airspace and so on. Uh so if you have uh a US attack on Greenland, uh that's going to influence uh you know the strength of the European Union and of NATO, and that is of concern uh to markets because of how important uh the European Union countries economies are to uh to the global economy, including to the US.

Steve Davenport: 2:54

But Clem, is haven't we had talk of this before? And is is it just are we gonna talk our way into this um happening? Because it feels like nothing significant has changed in what we're describing as the problem with Greenland, right? We have a base there, we have access to use, as they say, any means we want to in terms of protection of the US airspace. So why is why is it that Trump can turn this into a we need Greenland if you know for I don't know, what are we now, 250 years? Yeah, we haven't had Greenland, and now we we suddenly need it. Um is I I I'm sure there has to be more than just rhetoric here, right?

Clem Miller: 3:45

I don't think so. I think uh I think I mean clearly, and you know, we could spend an hour discussing this part of it, but there's clearly a lot of psychological uh dimension uh to this in terms of um you know things like the uh the sort of obsessions, let's call it that way. Obsessions. So I I I may personal personal obsessions by the president of the United States.

Steve Davenport: 4:12

I I try to stay away from picadillos and and obsessions, and I try to focus on facts. And so the facts I came up with for why we might want Greenland, besides the way the relationship we have now, are mineral rights, yeah, ability to locate ballistic missiles, not just anti-aircraft or anti-missile, you know, to actually have the ability from a location to impact Russia or other places. Um, you know, and that you don't want to say that's the reason we need to have it, but um display a bigger US on the map for for feelings of superiority. Well, that's the obsession issue. That's one of them, but controlling the the waterways because of Brent uh crude and and how critical oil and oilways that that the ships are passing, you know. I mean, those aren't what I would call issue one that need to be addressed today, but I could see people say those are some rational reasons why you might want to have Greenland instead of just being located on it. What's underneath Greenland? Don't you think there is some mineral benefit to it?

Clem Miller: 5:30

Well, there are, but it costs an awful lot of money to uh extract any of these minerals or or petroleum out of Greenland. Uh you know, Russia has some Arctic uh operations or did have some Arctic operations before sanctions took place. And it was awfully expensive uh to uh handle those. And it would be expensive for U.S. companies and other companies uh to try to do that in uh in Greenland as well. You know, if it were so easy uh to do this kind of thing, why wouldn't European uh I mean US certainly, but European uh uh and Australian mining companies and energy companies already be there. Why wouldn't they already be there if it was so easy to if it was so easy to take minerals out of the ground and and energy out of the ground? They they'd already be there. It's just it's just not cost effective. And and the technologies in some cases may not exist in order to uh in order to extract those. So I I I think, yeah, uh on a on a real surface level, uh, you know, you can say, well, Greenland is important for minerals and energy, but you can say that about a lot of places in this world that are important for for energies and energy energy and minerals. But the but that that ignores how easy and how cost effective it is to get uh things out of the ground. And Greenland is a place where it's awfully difficult to do that. So I can, you know, it's true minerals and energy resources uh are uh a factor, but I don't attribute that much uh to that uh in terms of uh being an immediate thing that uh would worth would be worth taking over Greenland for. That's okay.

Steve Davenport: 7:32

So let's say as investors, we see this Greenland is now an issue and something we want to obtain. Um, you know, one, could we just pay Dane, you know, the the Danish people for the the property or the control of Greenland through the same way we paid for Alaska? Two, could we just um come to a negotiation where we give people back some money over time and all the profits from Greenland natural resources go to the Danish people and we control the island, but they control the future benefits? Okay. Of course, C, we we need to invade and fight European Union troops. Um I mean, what are the scenarios going forward do you think is most important?

Clem Miller: 8:22

I've got I've got two scenarios for you, and both scenarios are are fall short of the of what Trump describes as complete and total control, right? Which I think complete and total complete and total control is something that's unrealistic, right? That's like setting forth an extreme demand and then being and then I think Trump would be willing to get something you know short of that that demand. So I think there's two possibilities here. Uh either one would require the European Union, Denmark to make concessions. So I think the one that's closest to meeting a U.S. demand uh would be Greenland becoming independent uh from Denmark, and then establishing what's called a compact of free association with the United States. Uh some of us may not uh realize this, but there are three sovereign island nations out in the Pacific Ocean, uh the Federated States of Micronesia, uh the Republic of the of the um Marshall Islands, and Palau, uh which uh have these compacts of free association. They're even though they're independent states, they rely on the United States for aid. They use the uh U.S. dollar, uh they uh they uh rely on the U.S. military. So, in a sense, certain aspects of sovereignty are exercised by the United States, even though uh for other parts uh they themselves are sovereign nations, have their own votes in the United Nations, and so on. So I think that's a possibility for Greenland, and it's it's actually been mentioned uh as uh as one uh potential responsibility. Now, just to make sure everybody understands this, we're not talking about you know something like uh a Puerto Rico relationship where Puerto Rico is not sovereign, but actually a part of the United States, even though it's not a state. We're not talking about that or U.S. Virgin Islands or or what have you. We're actually talking about real sovereign states that uh you know agree that are in this free association where they can you know pull out at any time. So that's that's what I think is a uh is one realistic scenario. The other realistic scenario is one where the United States is given sovereign base rights uh to certain areas of Greenland. So this would not include the capital where most of the people are, or maybe some other locations where there's uh where there are people. Uh but you know, sort of remote uh harbors and remote areas of Greenland uh where the U.S. could build up bases without necessarily interfering with local populations. And there is also there's a precedent for that too, two precedents for that. Uh one precedent is uh is in Cyprus. It's little little known that there are actually two British sovereign bases uh in uh in Cyprus. And those uh those sovereign bases are actually sovereign British territory where you know the UK flag flies, there are pubs. I mean, it's it they're real they're real sovereign uh territorial bases. So you could have that, it would be kind of like a um, so you have these bases there. It would also be kind of like guantanamo, right? In uh where the rest of Greenland would be either Danish or would be independent, but but the U.S. would control this uh this territory around a particular base. So that would be like a guantanamo situation. Uh or the you know, the third uh example of this kind of thing would be uh uh Diego Garcia, uh, which is a tiny island in the uh tiny set of islands down in the Indian Ocean, uh which have belonged to Britain are being given to Mauritius, uh, but where there's a U.S. base. Uh now the U.S. is not sovereign in that base, uh, like uh the U.S. is in Guantanamo or um Britain is in Cyprus, uh, but still it's it's under the uh the direct control of uh of the United States in a way that you know maybe other bases, U.S. bases around the world, uh are not.

Steve Davenport: 13:01

Uh the base in Greenland right now is not sovereign, but it is it's what uh a a lease or a hundred.

Clem Miller: 13:09

I don't think I don't think it's I don't think it's a lease, but you know, you could have these leases like you know, the lease uh you know Guantanamo's uh is uh I believe technically a lease.

Steve Davenport: 13:20

Uh so you you went to the point of how they're gonna exist going forward.

Clem Miller: 13:25

And I'm still at the I'm going to I'm going to potential outcomes if you assume that if you assume that this whole negotiation is going somewhere.

Steve Davenport: 13:36

Yeah, I guess my point was if we have investors, what is it, you know, what is likely to be the next step or the steps that are going to lead to this eventual outcome? And when will we know that outcome is not going to occur? So I mean, I'm looking at oil and saying, geez, you know, is this going to be good or bad for oil? Um, I think it's going to add more uncertainty in this space. So I think it probably, you know, raises the price of oil, which is something Trump doesn't want. Are you, you know, do you look at this and say this has real investment in implications? Or do you say this is just another crazy idea that's never going to occur? So therefore, I'm not going to try to plan or alter my investments.

Clem Miller: 14:25

Well, I don't think it, I don't think it should uh lead us to make any decisions right now regarding investments. Uh because I'm trying to say things are moving quickly, get corn. If something will be a good thing. Well, things things things may be moving quickly on the political, on the geopolitical front, but the point is that is that it would it'll take decades to develop uh these resources in Greenland.

Steve Davenport: 14:48

And I know that it's it it it to me, it's like why we focus on you know this as the you know the shield is not going to be built or even partially implemented by 29. So how does it, you know, how how does it really matter that we're doing it now? But you mean the Golden Dome? Or the Gold Dome, yeah.

Clem Miller: 15:10

Uh well, I mean, that's just like Star Wars was Golden Dome is kind of a pie in the sky concept.

Steve Davenport: 15:17

Okay, so we can well let's not evaluate the discrepancies in everything that's been said or done in the last 20 years.

Clem Miller: 15:26

But I I don't think that I don't think that has much impact on um, you know, if you really want uh defense companies that are uh uh are doing well by modern technologies, look at the drone companies, right? I mean the drone companies are doing fantastic, but but Golden Dome, that's that seems to me like you know a boondogle.

Steve Davenport: 15:46

Uh but the energy and it's a re-emergence of uh what Ronald Reagan said, isn't it?

Clem Miller: 15:52

Yeah, that's what I'm saying. And Star Wars, you know, the whole point of Star Wars was to freak out the the the Soviets uh with a plan that was basically BS, right? I mean, there was no real substance to Star Wars, and and it got them nervous.

Steve Davenport: 16:10

I guess I have to ask the question that's most important. How do how, if any, should investors react or not react to this information? In my mind, it's a non-issue because I don't think it will occur. Um, I I think that the higher tariffs and all of this stuff, the economic impact of it could be there.

Clem Miller: 16:29

But I agree with you that it's probably not an issue that anytime soon will be resolved or or even well, I don't I don't I don't I think that the real danger, like I said, is of a collapse in NATO and you and the EU to the extent that Russia can uh can do things to uh interfere uh with the you know the operations of European countries.

Steve Davenport: 16:55

And so does that mean that we don't buy European equities because we're afraid of the impact of this?

Clem Miller: 17:03

Uh I think that uh I think that one I think it would be appropriate to be somewhat conservative about European equities right now. Uh to have a lower allocation, uh really, until this whole thing gets resolved, I would have a lower allocation uh to European equities than you might otherwise have.

Steve Davenport: 17:23

Uh if you haven't I look at this as a buying opportunity in European equities. So I I kind of think that this has so little substance in terms of if if you look at it militarily, or you look at it US, you know, for the purposes of uh if you say the mineral rights are not that valuable, and you say, you know, I I I I'm trying to look for a reason why we're doing this. Not the reason that Trump has put forward, but a reason that someone behind Trump might say, Donald, if we did this, this would be the you know, the here's the benefits. So discuss them with Russia or Europe, but those are to us.

Clem Miller: 18:03

I think there might be people out there who are trying to buy these mineral rights, but I think at this point, the mineral rights are sort of paper rights. So they're gonna be buying the mineral rights and selling them to others, and then pass and then those are selling them to others, but real development uh to create real cash flows, I think is decades off.

Steve Davenport: 18:24

Okay. So I I agree with you that there's there is a possibility of European equities being more volatile in the next period. In your case, you want to kind of stay shy. I kind of believe we're gonna have more volatility this year. It might be an opportunity to pick some up that are at lower prices or better values. Um do you have any final thoughts on Greenland and uh the ice age of the US as we wrap it up here?

Clem Miller: 18:57

Well, I think we've covered a lot of territory in the available time. Uh, and I have a I have a feeling that we'll be uh you know, we'll be back to this subject uh unless, of course, uh half a dozen other subjects don't come up in the meantime.

Steve Davenport: 19:13

All right. Thanks, listeners. I appreciate you listening. This is a quick take, and uh as such, we don't have a full, you know, full knowledge and full ability to determine what the best impact is for investors, but thanks for listening, skeptics, and uh we look forward to serving you and helping you with your portfolios as we uh unveil more and more of 2026. It's been a busy three weeks so far. I don't know what this means for the rest of or let's say, yeah, almost three weeks. So stay safe out there and keep your head on the swivel. Thanks, everybody.