You're tuned in to the MBIT podcast led by Seamus Madan, Economic, and financial is broken down. Educating you on your financial journey. Hey, everybody. Welcome to the Embit podcast in which we discuss personal finance, tech, and entrepreneurship. Today, we worked up a wonderful episode for you guys, where we will be breaking down the current state of the economy with new CPI data, the future of the markets, And Elizabeth Warren on putting antitrust laws to work for the grocery train.
Quick disclaimer before we begin, the podcast is not financial advice. And it's not taking any political stance. Alright. First off, let's start with the inflation. We see a lot of it in the news recently. The last two inflation reports had a CPI or consumer price index of 6.2% and 6.8%, which had been steadily increasing since August in the summer. Which was around 5%. Now the CPI represents the average change over time in the prices paid by consumers for a market basket of goods and services.
For example, that might include basic food and beverages such as cereal, milk, coffee, gas, groceries, and numerous categories. Now, the Fed did initially want inflation to be higher than the target 2% because it has been under the 2% for the past few years before that. But we see things are now getting out of control. And just yesterday, the Fed released new CPI data with an inflation report of 7%. The highest it's ever been since 1982.
So here's why inflation is so high and here's where the government messed up. So people are paying up to $250 more for the same items compared to last year. Gas prices are up 49.6%. And if you didn't get a pay raise of at least 6.8% this year, you basically have a pay cut. So make sure you ask your employer for a raise, it's always worth asking, especially with the increased cost of living, not having any pay raise can have an impact on your financial situation.
And so why is there so much hecticness along with inflation? How did it begin? And where can we go next? So this started around March of 2020. This is when the inflation started to pick up when excessive money started to be poured into the economy to prevent it from a recession. Now the Fed did do a good job at preventing a recession. We could've easily had a recession in March, but because of the stimulus money and lowering interest rates, we did avoid a recession.
However, the Fed has kept its foot on the gas by still pumping over $6,800,000,000,000 into the economy in the past year. Now what happens when you print that much money is the more money you print, the value of the dollar decreases. Right? Now we can compare that, for example, to sports cards as an analogy. Let's say there's only 10 of this certain sports card of Steffen Curry. The prices of each of those 10 sports cards are gonna be quite high because of the scarcity aspect of it.
Basic supply and demand principles here. But if you change that ten, sports cards to, let's say, 10,000, they're not worth as much because there's a much higher supply and they're not scarce causing the prices per sport card should be decreased. Now we're seeing the same thing with the price of the dollar.
So when we take a look at what happened in the past and how we have improved since then, the Fed missed the financial of 2008 because the Fed's inflation model was broken because it didn't incorporate securities prices, residential housing, or residential real estate. When they decide they need a new plan for inflation, they didn't do anything.
They had an internal discussion to try to figure something out, but they just decided to leave it We're starting to see that impact here with inflation going through the roof and not controlled at all. The key takeaway here for the inflation aspect is it's here to stay for quite a bit of time. What you should expect in the future is the Fed is planning to start selling off bonds in the next 6 to 8 months. So we should start to see the inflation slow down.
But for now, inflation is definitely here and some of the ways you can fight that is not keeping a majority of your net worth in cash at these times is definitely good to have some extra cash cushion, but it's also good to make sure you have some money invested in other assets to offset the ridiculous inflation here. So the only way to try to fight that is being invested in these assets. For example, stocks, real estate, etcetera. Alright. Next and last topic for today's episode.
Thanks for tuning in. Again, if you are enjoying the episode, make sure to drop 5 star review down below. It really helps that a lot. And let's continue next with Elizabeth Warren claiming antitrust laws are necessary for the grocery industry. Let's take a listen. Tool that we have failed to use for decades now has been the antitrust laws. So that we get more and more concentration. Think of the example right now, for example, with grocery stores.
Remember how many grocery stores there used to be? And now what you've got is a handful of giant chains. And then what happens, Kroger, their profits just in the third quarter of 2021 were almost $900,000,000. That was more than 3 times what their profits were in the same time period in 2019. Now if they are able to expand profits, not expand prices, expand profits, That's because they have a lot of market dominance here.
If we move in on antitrust law, break up these giant corporations, then we get real competition, and then we get markets that are truly competitive. So yeah, there there are a few things wrong with this. First of all, during the pandemic, people aren't going to restaurants and are instead buying all their groceries, causing the restaurants to shut down.
So instead, all these consumers are transitioning to going into kroger, Target, Costco, Walmart, etcetera, to get more of their food because restaurant sales are down with 78% of restaurant operators reporting a decline in customer demand for indoor dining. In addition, The reason why you should not put antitrust in grocery stores is they are one of the most competitive industries in the economy right now.
Profit margins are extremely slim with the average grocery store only making 2.2% in profits. In addition, as we talked about for when you pour in $6,800,000,000,000 into the economy. Either prices are going to have to go up or there's gonna be strength, which is basically reducing the amount of product of the same The price increase isn't noticeable, but you'll get less product for the same price.
But obviously, most of it is we're seeing with inflation in the grocery stores prices are up around 15.7% compared to last year. So those are the 2 options. We see both in play, but has thing to do with them trying to get more money out of the customers. It's just that when you pour that much money into the economy, you're going to have to see an impact on the prices increase Alright, everyone. That wraps it up for today's episode.
If you enjoy the podcast, make sure to drop a 5 star review down below. If you enjoyed this type of quick little dive into recent events in the Marcus the economy, hit me up on Twitter at mbiet podcast. Happy to hear more about what type of topics you guys would be interested in. And thank you everyone for tuning into the embed podcast. We'll see you next that. Disclaimer, the MBIT podcast is reflecting the opinion of only the host. The podcast is for informational purposes only.
The podcast is also not a research report. It is not a recommendation to purchase or sell any stocks, holdings, or securities. The podcast is also not meant to serve as a basis of any investment decision.