Yes. Amazon will know every item you buy, how much, and when. But not much different than grocery store discount cards already used by most everyone for decades. I'm sure that info is sold, traded around, and aggregated.
I agree that this is another increase in the invasion of privacy that will probably end in a bad place. We need laws to prevent these systems, not just a few people holding on to scraps of privacy with desperate measures, like not buying a new car.