Inflation and energy are inextricably linked.

That’s not rocket science. As the price of energy goes up, so does the cost of everything from production to shipping. And then retailers pass on the costs they incur to customers.

Almost instantly, higher energy costs reach consumers with just about every purchase.

Our energy situation was already bad before the Russian conflict began. But then you add in that geopolitical tension – which has bottlenecked over 12% of the world’s energy supply – and we feel it even more.

That’s why I’m happy to report that American fuel prices have fallen for the seventh week in a row. The Wall Street Journal reports:

“The average cost of a gallon of regular unleaded gasoline sank to $4.16 Wednesday, the 50th straight day that prices have declined, according to OPIS, an energy-data and analytics provider. That is a 17% decline from the previous high of $5.02 a gallon set back on June 14, according to OPIS.

“Global demand for oil has fallen in recent weeks as economic growth has slowed around the world, including in China, analysts said. Demand data and consumer surveys also suggest Americans are driving less.”

This drop in demand is a sure sign that inflation has finally caught up with the American consumer. I reported yesterday on the slowing of our industrial sector, which plays a huge role in the amount of energy we consume.

Essentially, as our economy contracts, there’s less demand for the fuel that keeps it running.

Even on a direct demand level, many Americans report they’ve made adjustments to their daily driving habits. A whopping 88% say they’re driving less, and 74% are combining errands to save on gas.

The obvious question is where the balance between inflation and energy costs will meet their equilibrium. Since the two are so closely related, will the decrease in energy demand have a significant effect on our extremely inflated economic climate? 

If we look at the Consumer Price Index (CPI) for June, we can see that energy costs accounted for a higher percentage of that record 9.1% increase than all other categories combined.

So as energy prices continue to drop, the CPI should soften. It’s just a matter of how far they’ll continue to fall.

More Non-REIT News to Know About 

We’ve probably all dreamt of the IPO that will put millions in our bank accounts. And, over the last couple of years, we have seen some pretty crazy get-rich-quick picks that left some early-in investors holding onto huge bags of cash.

From the GameStop (GME) squeeze to the Dogecoin days, there have been lightning-in-a-bottle moments that have left a select few with jackpot portfolios.

This happened again just this week with a Hong Kong-based company called AMTD Digital (HKD). In a matter of days, its stock jumped from a July IPO of $7.80 to a peak value of over $2,555 – an over 21,000% increase.

Aided by the Reddit army on Wall Street Bets, this stock soared in such a fashion that even the AMC (AMC) and GME craze looks like child’s play. What’s even wilder is that this incredible run seems to have happened for no particular reason.

“To our knowledge, there are no material circumstances, events, nor other matters relating to our company’s business and operating activities since the IPO date,” the company said in a statement earlier this week.

As such, those looking to cash in on this flash in the pan will likely find that the party’s over. The stock shed about 34% yesterday, proving once again that the market should be treated like a business, not a casino.

Sure, sometimes someone somewhere hits it big. But the chances of it being you aren’t high enough to mess around with.

The World According to REITs 

New Lake Capital Partners (NLCP) is proving itself to be a very innovative real estate investment trust (REIT). This cannabis funder leverages sale-leaseback transactions and third-party purchases across 31 cannabis cultivation facilities and dispensaries.

The company has a strong capital base. And since it works directly with its tenants, NLCP can increase returns quickly in a quickly growing market segment.

Recently, it acquired even more capital for further expansion, adding two lenders to its existing five-year revolving credit facility. It also expanded the aggregate commitment under that facility from $30 million to $90 million.

CEO Anthony Coniglio said:

“We are pleased to increase our credit facility and appreciate the trust of our newest bank partners. Access to debt capital is a competitive advantage in this challenging environment and should allow us to continue our disciplined approach toward investing in high-quality cannabis real estate.”

This is a great example of an innovative REIT putting its balance sheet and debt capital to work for it. Hopefully, this results in long-term growth and continued confidence from investors.

Today, I consider the company a Speculative Buy.

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly if you buy in at inflated prices.

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