Three decades later and 7,000 miles away, Chinese officials are learning firsthand what James Carville warned the globe about the bond market.

In 1994, Carville was a strategist for U.S. President Bill Clinton. He’s best known for his “it’s the economy, stupid” mantra. That year, Carville made another famous, and prescient, observation: that he’d like to be reincarnated as the bond market. “You can intimidate everybody,” he quipped.

This was during the balanced-budget negotiations. At the time, debt investors were hypersensitive to the slightest hint, good or bad, about zigs and zags in Washington’s fiscal policy debates.

To be sure, this now feels like a few lifetimes ago as America’s national debt tops $33 trillion. Nowadays, lawmakers routinely play politics with raising the debt ceiling or funding the government in ways more befitting a banana republic than the protector of the globe’s reserve currency.

But Carville’s reference is arguably truer now than ever. Today, the “bond vigilantes” that the Clinton White House so feared 29 years ago are bidding U.S. bond yields up to the highest levels in nearly two decades. That’s causing a repricing of assets everywhere.

Raising the stakes: China has $830 billion worth of state wealth sitting in U.S. Treasury securities. Of course, Japan has considerably more—$1.1 trillion of Washington’s IOUs. But then Tokyo’s foreign-exchange reserve managers aren’t selling dollars fast enough to inspire conspiracy theories.

One is that Chinese leader Xi Jinping’s government is dumping dollars to kick the U.S. when it’s down. Washington, after all, is just two months off a Fitch Ratings downgrade over Republicans holding fiscal policy hostage. The economy continues to sustain blows from the most aggressive Federal Reserve tightening since 1994 and 1995, when Carville served a president.

Now, President Joe Biden’s White House is also grappling with how to service a national debt that’s swelled 136% since the last time Washington lost a AAA rating. That was from S&P Global Ratings in 2011, when the U.S. debt was $14 trillion.

This theory is easily dismissed by considering how a dollar firesafe would boomerang back on China in devastating ways. The more U.S. yields surge, the less demand there will be among American consumers for Chinese goods. The more the dollar rises, the harder it is for China’s property developers to avoid defaulting on overseas debt.

Yet one reason to take China intrigue chatter somewhat seriously: all those sell orders coming in from Beijing.

“Maybe China is behind the rise in U.S. long rates," Torsten Sløk, chief economist at Apollo Global Management, wrote in a recent blog post, pointing to data showing Beijing has sold $300 billion of Treasuries since 2021. “Growth in China is slowing for cyclical and structural reasons, and Chinese exports to the U.S. are lower. As a result, China has fewer dollars to recycle into Treasuries.”

Or are the broader BRICs nations—Brazil, Russia, India, China—doing the selling? Brazil sure is. Vladimir Putin, who learned the hard way after his Ukraine invasion that President Biden could freeze chunks of Russia’s Treasuries holdings in retaliation, sure isn’t buying.

Neither, it seems, are incoming BRICs members Saudi Arabia and the United Arab Emirates. Perhaps it’s just a coincidence, but most of the grouping’s members are actively working to replace the dollar as the linchpin of global finance.

Of course, there’s a much simpler explanation: the broad mix of U.S. policies are turning off too many global investors for comfort. Worse, the biggest of the big money at Japan’s Ministry of Finance and China’s State Administration of Foreign Exchange, have doubts about U.S. debt.

Reasons why include runaway government borrowing, stubbornly high inflation, a trade war with China that’s unnerving developing nations, a degree of Fed tightening that many deem excessive and political tumult that may be tempting Moody’s Investors Service to join S&P and Fitch in downgrading the U.S.

The commutative effect of all these worries has Treasury yields at the highest levels in at least 16 years. With Washington hurtling towards another budget crisis in the weeks ahead and a bruising election 2024 fast approaching, investors may have even more reasons to doubt the dollar’s stability. The shock attacks that Hamas launched on Israel over the weekend only heighten geopolitical risks for global markets.

So does the wildcard of another Donald Trump presidency. During the first one, from 2017 to 2021, U.S. debt exploded by nearly $8 trillion. The idea of an authoritarian wannabe with a history of talking openly about defaulting on U.S. debt getting a second crack at the White House must have Asia’s currency reserve managers losing sleep.

In the meantime, the bond vigilantes that so spooked Carville three decades ago are in the driver’s seat. As these activist traders who take matters into their own hands bid up U.S. yields, they’re taking Asia’s asset markets along for the ride. China especially, as Xi’s team navigates a perilous global environment that would intimidate anyone.