Silver, Juice and Power

If you noticed, Iran recently (tried) to settle oil in crypto and Chinese yuan:

Source: Bloomberg

That’s a massive, bona fide afront to US dollar hegemony, so it’s no wonder Trump launched a blockade of the Strait.

These days all we hear about is blockades, piracy and naval conflict.

You’d be forgiven for thinking the world has reverted to the modus operandi of the 17^th century Caribbean.

So, is this the golden age of commodity trading?

Today, I’m going to show you how whacky the world of commodity trading gets.

As well as how thinking like a commodity trader can help make you a better investor.

It all comes down to “pairs.”

Or, how much of X can I get with Y?

This goes right to the heart of where the world is going over the next few years.

For instance, regular readers will know that yesterday I was talking about lithium and the coming scramble for battery metals.

(Lithium carbonate is usually priced in yuan, but I also pay attention to USD settled lithium prices too)

But let’s not get ahead of ourselves, here’s the context which has everyone’s attention right now.

Iran’s tollbooth and the petrodollar

For fifty years, the rule of the game was simple.

Oil was priced in US dollars.

You wanted energy, you needed dollars. That “petrodollar” loop is what helped cement US financial power after the 1970s.

Now you have a sanctioned state saying, “actually, we’ll take yuan, or a string of characters on a blockchain.”

This is legitimately WILD, in terms of global implications.

If even a small share of global oil flows start clearing in other units, it chips away at the network effect that has made the dollar the default unit of account for energy.

Now for the internal psychology of commodity traders…

Commodity pairs: how traders really think

Most people follow oil in US dollars.

Commodity traders take it a step further.

They constantly think in ratios.

Gold versus oil and things like copper versus wheat.

These pairs tell you whether a move is really about the thing you’re looking at, or the money it’s priced in.

If both oil and gold spike together in dollars, maybe it’s the dollar that’s moving.

If oil rips higher against gold, then you’re probably looking at a pure energy shock.

Now, with Iran trying to pull oil flows into yuan and crypto, and with the US still clearing most contracts in dollars, you can imagine future traders watching USD/OIL, CNY/OIL and maybe even BTC/OIL as separate pairs.

Same barrels, different money and very different power structures.

Now here’s where it gets whacky…

The silver / orange juice “pair”

Let’s have some fun with this idea.

Because once you start thinking in ratios, you can compare almost anything.

Even silver and frozen orange juice concentrate.

Seriously.

Right now, on my custom chart, the silver/OJ ratio sits around 2.58:

Source: TradingView

[Click to open in a new window]

That means it takes about “two and a bit” ounces of silver to buy a pound of frozen orange juice.

With OJ around US$195 per pound and silver roughly US$75 per ounce, that ratio checks out.

It’s also a historically low ratio in data going back to pre-2010.

I know, it sounds absurd “the silver-orange juice ratio.”

Two bars of precious metal for a pound of frozen breakfast juice.

But there’s a serious point buried in that absurdity.

Silver lives in this strange space between industrial metal and monetary metal.

It goes into solar panels, electronics, medical equipment.

It also rides the same emotional waves as gold when people worry about currency debasement and the safety of their savings.

Orange juice, on the other hand, is simple.

We like to drink it with breakfast.

It comes from trees that need fertiliser, labour and a lot of diesel-burning machinery.

Then it gets concentrated, frozen, shoved into cold storage and shipped around the world in energy-hungry logistics chains.

(**Caveat: Having personally visited an OJ factory in 2023, let’s ignore the problems with Brazilian OJ supply that drove the price higher for two years between 2023 and 2025, of course**)

Anyway, when that silver/OJ ratio moves, it’s quietly blending three forces:

• Monetary fear (how badly people want a “hard” asset like silver).
• Industrial demand (solar, electronics, etc).
• Energy and food costs (what it takes to grow, freeze and ship juice).

OJ becomes an energy story wrapped in a breakfast product.

Silver is a money-and-industry story wrapped in a shiny metal.

The ratio between the two is like a funhouse mirror showing how those forces collide.

Money, energy and power

Back to Iran.

Those yuan and crypto tolls are happening at the exact moment the world is grappling with an energy shock out of the Middle East.

When a big energy importer like China accumulates physical gold, and one of America’s main adversaries starts collecting yuan and crypto at a key oil chokepoint, they’re both playing the same long game.

They are hedging the existing dollar system.

They are telling you, in action rather than words, that “what counts as money” is part of the battlefield.

Energy flows are the bloodstream.

Money is the oxygen.

You cannot think about one in isolation anymore.

Thinking like a commodity trader

This is where the silver/OJ ratio becomes more than a cute chart.

Commodity traders survive by asking second-order questions.

Not just “What is the price of X in dollars today?”

But “What is the price of X versus Y?”

“What does that say about the money unit?”

“How might energy costs be distorting this picture?”

For Iran’s tolls, the second-order question is not “Will this push oil to US$120?”

It’s “What happens if a meaningful slice of global oil starts clearing in currencies that compete with the dollar?”

For orange juice, the second-order question is not “Is OJ too expensive at US$195?”

Now, dead set, for the record: I am bullish on the OJ silver ratio.

I think it can re-take the long-term ratio mean given the energy costs that are about to flow through a range of inputs into the OJ-industrial complex.

It should outpace silver price upside, in my view.

But try it yourself, start thinking like this:

“What is the market really pricing in about diesel, fertiliser, weather risk and food inflation when juice is still only worth a measly couple ounces of silver per pound?”

When you train yourself to think this way, you stop seeing isolated headlines.

You start seeing a network.

Iran’s tollbooth, China’s gold buying and how that relates to diesel spreads.

AND YES, EVEN: Silver/OJ ratios.

Time for a glass of sweet, sweet OJ.

Wait, where are my silver coins?