New Delhi, Oct. 6 -- In September 1992, Scott Bessent worked for George Soros on the famous trade that broke the pound. The Quantum Fund built a position against the sterling that the Bank of England could not defend, and the bet made a billion dollars for the traders.

Bessent now runs the US Treasury, and thus finds himself on the other side of the battle. He told yen traders in September: "I am the house now." Bond investors heard it too. They have relentlessly pushed up yields on US government debt that is due in 10 years. London taught Bessent that a government holds a price only as long as the market allows it to.

Public debt levels have climbed across the world over the past two decades, especially in developed economies. Much of ...