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The future hinges on Greenland, if President Trump acquires it, and by what means.
Once again, we are experiencing a political shift that could have dire economic consequences. To be clear: I don’t want to speculate. I do, however, want to follow a potential path of events in the case of further escalation.
In investing, we often weigh risks higher than rewards. There are a few reasons for this. It’s challenging to recover from a large loss. High risk can mean amazing gains, but also bankruptcy. Accounting for risk also helps with designing potential safety nets to prevent worst-case scenarios.
The risks are high when it comes to Greenland. It is helpful for me to lay out likely possibilities, no matter how negative, when navigating the markets.
Below is not what will happen, and it is not financial advice. But it is an exploration of how taking Greenland by force could irreversibly damage the United States economy and global hegemony.
Greenland and Denmark have both rejected the current administration’s attempts to buy the island. If the United States were to use force to acquire Greenland, we’d have a cascade of problems, starting with NATO.
Attacking a NATO member is a violation of the treaty. There are two articles of the North Atlantic Treaty that deal specifically with collective defense, Article 5:
The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defense recognized by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area.
Any such armed attack and all measures taken as a result thereof shall immediately be reported to the Security Council. Such measures shall be terminated when the Security Council has taken the measures necessary to restore and maintain international peace and security.
As we can see, Article 5 clearly states that if a NATO member is attacked, the rest of the collective will come to their defense. What happens if the aggressor is also a NATO member? Based on Article 1, which states that members cannot attack each other, we can only assume that the United States will first leave NATO or NATO dissolves.
That said, let’s assume the remaining members choose to support each other in this crisis and defend the attacked party against the United States. We cannot be sure what will happen if this occurs, but so far, it appears most NATO states could support Greenland and Denmark.
Armed force isn’t the only method of defense. With the United States military being the largest and most technologically-superior in the world, I believe it’s unlikely we’ll see a physical struggle. Member countries can instead choose economic or social exclusion to put pressure on the United States. Boycotts, divestment, sanctions, and embargoes are all possible in this environment. The EU’s recent threat of retaliatory tariffs are just a drop in the bucket.
We already have a name for this phenomenon: “Sell America.”
When Trump first announced his new tariff policy in 2025, investors began dropping U.S. treasury bonds. This rapid sell-off was dubbed “Sell America”, and it is still used to describe this form of market turbulence.
Let’s break down what this means in regards to the Greenland question. If the United States does attack Greenland or Denmark, it will likely be kicked out of NATO. Even if no armed attack is launched, it’s likely member states will first begin with economic leverage to force peace.
NATO members alone hold $8 trillion in United States debt through owning treasury bonds and equities. Choosing to sell these assets would weaken the dollar and the U.S.’s ability to meet its budgetary demands.
In other words, acquiring Greenland could increase the deficit and “Sell America” could reduce our ability to pay it, making an economic crisis more likely.
If other countries join in, this act could turn a crisis into a collapse. Japan and China hold another $1.89 trillion in treasuries. If they follow suit, the United States would lose up to $9.89 trillion in assets. For context, the U.S. government spent $7.01 trillion in 2025 and holds a deficit of $1.78 trillion.
To make ends meet, our government would need to revisit the budget to ensure the federal government can pay the bills. This can result in more austerity, followed by a depression in spending. We would be hard pressed to find federal funding for infrastructure or critical services.
But that’s not all of it. We haven’t covered other potential retaliations, such as:
The uncertainty over the future of U.S. trade relations and NATO membership is almost as bad as the consequences if we invade Greenland. Lingering too long in the unknown leads to investor speculation. Investor speculation leads to market drops and preemptive divestment from the United States. Already, there are funds that focus entirely on emerging markets rather than re-invest in the American economy.
That’s a problem, not just for your portfolio but for the cost and standard of living within the United States.
The purchasing power of the dollar is at stake. Economic retaliation can damage recovering industries, drive inflation, and usher in an era of extreme austerity. If the federal government is unable to pay its bills—something unheard of thus far—due to a territorial spat, it is the people who have the most to lose.
However, we can’t prepare for the future based on speculation. We can only do our best to create resiliency. Having an emergency fund, keeping cash on hand, and having a mixture of assets are general best practices.
But setting up and managing these different safety nets by yourself, while investing, can be challenging. I recommend that you speak with your financial advisor about how these events have changed their investment strategy and recommended client safeguards.
If you’d like to talk about how current events may affect your portfolio, consider booking a complimentary call. I’d love to answer your questions.
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