Rapidly Rising Food Prices Continue to Hurt Consumers and Stall Economic Growth; Special Report by Leading Financial Newsletter Profit Confidential

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According to Michael Lombardi, financial expert and lead contributor to Profit Confidential, food prices are rising at an alarming rate, with a 10% increase from June to July. These rising food prices, Lombardi notes, will take a toll on consumer spending and ultimately corporate earnings, stalling economic growth.

Rapidly Rising Food Prices Continue to Hurt Consumers and Stall Economic Growth; Special Report by Leading Financial Newsletter Profit Confidential

Rapidly Rising Food Prices Continue to Hurt Consumers and Stall Economic Growth; Special Report by Leading Financial Newsletter Profit Confidential

“This is all due to the drought being witnessed in the American Midwest, and a dry summer in Russia, the Ukraine, and Kazakhstan,” states Lombardi.

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According to Michael Lombardi, financial expert and lead contributor to Profit Confidential, food prices are rising at an alarming rate, with a 10% increase from June to July. These rising food prices, Lombardi notes, will take a toll on consumer spending and ultimately corporate earnings, stalling economic growth.

Lombardi reports that the price of corn and wheat skyrocketed 25% from June to July and soybean prices increased by 17% in the same period.

“This is all due to the drought being witnessed in the American Midwest, and a dry summer in Russia, the Ukraine, and Kazakhstan,” states Lombardi.

In the article “World Food Prices Rise at Alarming Rate; Up 10% in July,” Lombardi note that corporations can pass their higher costs onto their customers, but in return, if consumers don’t buy as much because of higher prices, the corporate earnings will decrease.

The more money consumers spend on food, the less they’ll have left to spend on other goods, reasons Lombardi.

“…consumer spending in [the] U.S. accounts for 70% of the gross domestic product (GDP),” says Lombardi. “Thus any change in consumer spending can have a ripple effect on the economy and corporate earnings.”

U.S. consumer spending rose 0.4% in July compared to June, but Lombardi highlights the fact that while a 0.4% increase in consumer spending may sound good, by no means is it impressive. He points out that this increase is overshadowed by the fact that there was no change in consumer spending in June and there was a decline in May.

From all the evidence provided, Lombardi concludes that there are clear signs consumer spending is at the point of breaking down further due to higher food prices—which is not a good sign for economic growth.

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.

Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.

Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.

Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.

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