The 1987 U.S. stock market crash gave rise to all sorts of "now is the time to panic" and "the world is ending soon" books about financial crises, and economic depressions.
None of it came to pass, because the Reagan revolution demolished communism without a shooting war, and global capitalism surged in the aftermath.
But in 2004, the next world war has already begun. It is an economic war, where blocs of countries are being organized and urged to join in alliances rooted in ethnicity, religion, or nationality. It is also a culture war, rooted in religion and ethnicity (Islam against 'the west') with a long history that makes it far less amenable to a rational or peaceful resolution thatn was 'The Cold War'.
The US failue to define terms of engagement, and thereby control the outcome of the Iraq war of 2003-2004 is the end of the dream for a Pax Americana, with the US acting as the arsenal of a unified, largely democratic world. Instead, we have the non-polarized and chaotic world that authors Davidson and Rees-Moog feared.
It is a world where capital flows along paths of least resistance, and once welthy populations are devastated by capital outflows. Governments will likely become more tyrannical and shift from benevolent welfare statism to active police statism -- to preserve order.
The book takes its title from the infamous Baron von Rothschild quote about investing where blood runs in the streets. In such places, people crave peace, and safety. They care not who makes the laws, nor who coins the money.
WHile this book seemed absured and hyperbolic in 1987 (like most of the gloom and doom texts of that year), it sees eerily prophetic looking ahead past 2004 and 2005. State-less terrorism is a defining power in today's world. Economies with aging populations are becoming consumption societies, which produce less as the populations age. As exports drop, net inflows of wealth dry up, and the results are soaring government debt, declining employment opportunities for younger people, and increased class divisions and stratifications.
The "great depression of 1990", predicted by dozens of authors, was postposned by the fall of communism, and the expansion of capitalism into eastern Europe & Russia. The collapse of Communism also resulted in a 'peace dividend' that reduced defense costs in the U.S., and provided financial capital to fund new business ventures and fuel economic growth.
The U.S. federal reserve (and other central banks) keept inflation low by funding productive rather than defensive projects. The commercializing of formerly military & defense technologies (the internet, for example) generated economic expansion. That was a cyclical expansion, dependent on the creation of major new growth industries. In the 1990's it was information technologies (communications, networking of data systems, and the opportunities created by rapidly dropping costs for Information Technology equipment. Biotech and life-sciences, the next (current) new industry, has not proved to be stable or predictable in terms of products and markets. Financing models are far less certain.
The economic growth and expansion cycle made possible by the 'peace dividend' and the rapid global advances for Information & Communications tecchnologies postponed the "great depression of 1990". But with a new global war clearly underway, defense and the economic austerity needed to fund a long term global military effort will be the focus of governments. Civil peace is out, and general prosperity is no longer a priority. Thus, it appears that the expansion cycle is coming to an end. The Great depression of 1990 may become the (even greater) depression of 2010.
It is almost scary to read this book from 1987 and realize that the authors may be correct, but their time-line was about 16-17 years ahead of events.