Everything requires energy to produce, grow and distribute. Now that we are approaching European fuel prices (and I don't believe the "good old days" of cheap energy will ever return) the cost of goods - all goods - will increase. It takes volumes of oil to produce diesel and gasoline. Those two energy sources are what it takes to transport goods.

Everything is everything. Food, clothing, auto parts, toys, shoes, machinery, laundry soap - you name it - will have to go up in price.

Some of those items have already increased.

There is a very slight competitive advantage here. The relatively cheap Asian goods that are shipped across the Pacific in cargo containers will also go up. It costs a lot of money to ship across the wide expanse of ocean, unload it at ports and ship it on trains and trucks to the Wal-Marts of America. The cost of shipping from competitive U.S. manufacturers will be lower. Therefore, U.S. manufacturers will be able to compete against some Asian sources.

Yesterday, giant General Motors woke up and decided to get with the times. They announced four truck and SUV plants will shut down. They believe it will be a permanent closing. The GM brand "Hummer" is on the block. They will close production of that gas hog and offer it for sale if anyone wants it.

GM has always been a slow awakener. They may be too late to save the company in its present condition. Foreign and even some domestic auto manufacturers are already way out in front with hybrids and electric technology. GM is way, way behind.

GM was a 40 dollar stock last fall. It is in the teens today. I predict it will be a single-digit stock by year's end.

Ford is about six bucks and change. It has recently dropped below that and more recently charged up to eight dollars and change per share. Ford has unleashed a flurry of hybrids on their lots and they are selling well.

Chrysler is now privately owned and doesn't have to report its earnings and sales as do the other auto giants. But there are many new models on their lots that use fuel-efficient systems.

The killer is the price of diesel. It used to be cheaper than gasoline, but now it is way higher. Our transportation and distribution system runs on diesel. That is why everything is going to cost a whole lot more.

I predict many people will go back to summer gardening. You may see "victory" gardens again. More people will buy local. Farm stands will proliferate. Farmers' markets will be an everyday thing.

A good stock play here: garden tool manufacturers.

I watch the stocks. Three months ago I recommended to a friend that he pull his money out of GM. At the time I told him to put it in a company named Potash. Potash manufactures fertilizers, among other things. Potash was selling near 120 per share. Yesterday it closed over 208 dollars.

Three months.

Instead, he kept the GM shares.

He drives a Cadillac that gets 9 miles per gallon on the open road.