Very Interesting!

You may call me naive but...
Isn't raising interest rates to counter inflation a little bit like fighting for peace or, ummm, fornicating for chastity?
"I want to keep prices down, so I'm going to increase the price of the Ultimate Commodity - money!"
Huh?
I understand the stated underlying principle is that increasing the cost of money - the cost of borrowing, that is - will supposedly dampen demand for 'consumer goods'.
Good Idea; Too Bad It's Wrong!
Raising interest rates to reduce demand would do very nicely in that mythical market: You know, the one where the marketplace is always right; everything is bought and sold at a price agreeable to both participants; supply meets demand; stocks always reflect the true value of corporations, etc. The very definition of a capitalist economy.
We don't have a capitalist economy though. Haven't for a long time now. What we have today is a consumerist economy. In this economy consumption, therefore spending, is driven primarily by two factors; need, and desire. In this economy increasing the cost of borrowing has very little to do with driving consumption. Raising the price of food, for instance, does nothing to reduce peoples' need for food. Raising the price of a luxury SUV does very little to reduce peoples' desire for one. Cost is at most a secondary factor here. Demand is largely inelastic. Expectation trumps reality.
What raising interest rates - will - do is to keep people (and institutions, and governments) buying, not selling, bonds. Despite the vice president's saying that US government bonds "aren't worth the paper they're printed on", they do represent an island of predictability in a sea of uncertainty. So far.

At the moment, what Alan Greenspan is doing is walking a tightrope (and doing it very well, thank you) of increasing interest rates in step with inflation, so as to make it appear that he is countering inflation, while disguising the inflationary influence his rate increases have on the economy.
The President thanks you, Alan Greenspan.