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Well, in theory one could argue that since glycogen stores and insulin levels are at their lowest first thing in the morning the body would have to tap into those fat stores for energy.
Unfortunately it doesn't quite work that way, and I'll explain why. When glycogen stores are low the body is not selective as to what it converts into energy. This means that also protein, which is basically what your muscles are made up of, may be converted into glycogen for energy.
So the problem with 'fasted cardio' as it's often referred to, is not just that you don't necessarily lose more body-fat, but muscle mass and strength can be lost in the process, leaving you feeling weak. That is of course if you exercise the natural way. Again, I will expand on this.
It's important to know the facts, as there's plenty of information out there but I feel very little is complete and totally honest. Performance enhancing drugs which are widely used in almost all sports today, have what is called an 'Anti-catabolic effect' which means they reduce the rate at which protein is broken down in the body. This allows athletes for example to exercise for longer stretches of time in order to improve their performance and not sacrifice any hard earned muscle and strength. In a similar manner some people use such drugs in conjunction with 'fasted cardio' to maintain more muscle mass and strength while shedding away body-fat.
I don't encourage the use of such drugs, even fat burning supplements containing high doses of caffeine (or Guarana) are not always a good idea. The way to obtain results which will last is a consistent low calorie, balanced diet coupled with an intense regular exercise regime. So rather than running on empty, I recommend always having a light breakfast before, even just 30 grams of wholegrain cereal with some skimmed milk. Also, make sure to wait for at least an hour before exercise.