I used to be at CES in Las Vegas this week, and I’ll have far more to share with you about what I noticed there in later points.
However in the present day I wish to discuss what occurred earlier this week, when U.S. forces entered Venezuela and captured its president, Nicolás Maduro.
The Trump administration framed the operation as a law-and-order mission to implement long-standing U.S. indictments tied to drug trafficking, and to dismantle what it calls a narco-state.
However there was clearly extra to it than that.
Whether or not you applaud the transfer or have been appalled by it, there was nothing ambiguous about its objective. It was meant to engineer a political transition in a rustic that after produced greater than 3 million barrels of oil per day and now solely produces a fraction of that.
By appearing decisively, the Trump administration signaled it’s keen to make use of power — not simply by way of stress or sanctions, however by way of direct navy management — to guard what it considers important U.S. pursuits.
That’s why I don’t see Venezuela as an remoted occasion. I see it as the primary domino in a broader effort to develop U.S. energy.
And I predicted the subsequent domino to fall almost eight months in the past.
The First Domino Falls
Final Could, I joined Porter Stansberry to elucidate why Trump’s discuss of making Greenland the 51st state was extra than simply rhetoric.
After this week’s occasions, I imagine the percentages are even greater that it’s going to occur.
What occurred in Venezuela is proof that Trump’s workforce desires to make sure that the U.S. has leverage over our power provide and commerce routes, and to safe long-term energy on this hemisphere.
That mind-set places Greenland squarely again on Trump’s radar.
Picture: NASA/Ames Analysis Middle
And he’s not being quiet about it.
White Home press secretary Karoline Leavitt advised CNBC on Tuesday that Trump and his workforce are contemplating “a variety of choices” with a view to purchase Greenland, even when it means “using the U.S. Army.”
Why is he so eager on making Greenland a U.S. territory?
It’s easy. The Arctic isn’t an empty frontier any longer.
Over the previous 20 years, common Arctic temperatures have risen almost 4X sooner than the worldwide common. That is accelerating ice soften and opening up territory that was beforehand inaccessible.
In consequence, Greenland has shifted from a Chilly Battle outpost right into a strategic hub tied to new transport routes, power reserves and navy infrastructure.
Based on the U.S. Geological Survey, the broader Arctic area comprises roughly 13% of the world’s undiscovered oil and 30% of its undiscovered pure fuel. What’s extra, it comprises important deposits of uncommon earth parts which might be important for superior electronics, AI {hardware}, EV motors and fashionable weapons techniques.
Greenland alone holds commercially related deposits of neodymium, dysprosium and different crucial inputs the U.S. presently will depend on China to provide.
We’ve talked earlier than about how uncommon earths are America’s Achilles’ heel within the race to AI. China presently controls about 60% of worldwide uncommon earth manufacturing and almost 90% of the processing wanted to show these minerals into usable supplies.
Regardless of years of effort, the US nonetheless depends closely on that provide chain.
However Greenland is among the few locations the place these minerals exist at scale with out falling beneath Chinese language or Russian management.
And that’s solely a part of the rationale why the world’s largest island issues strategically.
Contemplate the way forward for power.
Picture: worldoil.com
Venezuela’s collapse eliminated thousands and thousands of barrels per day from world output, and it uncovered how fragile power markets grow to be when provide is politically misaligned.
Greenland represents the alternative. Its giant reserves are undeveloped however probably alignable with U.S. pursuits.
In different phrases, Greenland’s oil and fuel reserves supply long-term provide safety quite than short-term output.
And its place alongside future transport routes provides one other layer of potential leverage for the U.S.
As ice retreats, routes just like the Northern Sea Route are open for longer stretches of the 12 months. In some instances, transit distances between Asia and Europe will be reduce by as much as 40% in comparison with conventional routes by way of the Suez Canal. That cuts gas prices, lowers insurance coverage threat and reduces reliance on slim chokepoints that may be disrupted by climate or accidents.
Whoever controls these routes has the flexibility to affect commerce flows.
And each nation is aware of it.
That’s why Russia has spent the final decade rebuilding its Arctic presence. It has reopened Soviet-era bases and deployed new radar and missile techniques. It has additionally expanded the world’s largest icebreaker fleet, together with nuclear-powered vessels designed to maintain Arctic lanes open year-round.
China has taken a special method. It declared itself a “near-Arctic state,” investing closely in Arctic analysis stations, port infrastructure and mineral exploration agreements tied to long-term provide chains.
Merely put, Beijing views the Arctic as a future logistics hall. However from Washington’s perspective, there’s extra to it than that.
It’s additionally about protection.
Greenland sits between North America and Europe.
Picture: Wikipedia Commons
And it hosts crucial early-warning radar and space-tracking infrastructure.
Fashionable missile trajectories more and more go over the Arctic, and hypersonic weapons depart little or no time to react. Being positioned farther north helps detect them sooner. And with in the present day’s expertise, even a couple of additional seconds matter.
Computing infrastructure is one other consideration.
Synthetic intelligence has turned information facilities into strategic belongings. These amenities eat huge quantities of energy and generate excessive warmth. Cooling alone can account for 30% to 40% of working prices.
However chilly climates flip cooling from an issue into a bonus.
Greenland affords persistent low temperatures. It additionally gives proximity to main markets, and potential entry to renewable power.
As AI workloads scale, these benefits will compound.
Put all of these items collectively, and you may see why I mentioned final Could that Trump’s Greenland rhetoric deserved to be taken significantly.
And why I imagine that what occurred this week in Venezuela appears much less like an exception and extra like a preview.
Right here’s My Take
The Venezuela operation wasn’t only a strike on Maduro’s regime.
It was a sign that — beneath the Trump administration — the US is keen to make use of navy power to reassert management over strategic geography.
Greenland isn’t more likely to grow to be a U.S. territory subsequent week.
However what was as soon as a punchline for late evening hosts has now grow to be a possible actuality.
Simply as I predicted final 12 months.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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