Doom for Fun and Profit

A banker who can write is unusual enough. A banker who starts writing novels in jail, and transmutes global finance and oil politics into plausible thrillers about world economic collapse --well, there is only one: Paul Erdman. His third novel, The Crash of '79, is in its 25th week on the bestseller lists, has been bought by Paramount for a movie, and is diverting not only ordinary readers but also corporate executives and government officials, who assure each other that its forecast of doom will not come true. Certainly not. Of course not.

Nonetheless, what sets the book apart from other current bestsellers is its eerie believability. Out of reams of newspaper and magazine clippings, chats with former banking cronies, Middle East experts and even a nuclear physicist, Erdman has fashioned a grisly tale of international power politics and financial double-dealing that bring on a global economic calamity.

Banned in Iran. Anyone who has read a newspaper in the past three years will recognize real-world dilemmas: a politically volatile Middle East, with Saudi Arabia and Iran at loggerheads over oil prices; New York's banks hungering for Arab oil revenues to fend off a looming liquidity crunch; a spreading Middle Eastern arms race, with the U.S. shipping ultramodern weaponry to all takers in a frenetic struggle to retain influence and hold the Soviets at arm's length. The villain is the Shah of Iran, who appears as a double-dealing megalomaniac bent on re-establishing the Persian empire by military conquest, and secretly developing a nuclear arsenal with which to blackmail his Arab neighbors. By story's end, the Western world is in shambles, with America's banks engulfed in a depositors' panic, supermarkets emptied by frantic hoarders, and half the world's oil reserves contaminated by nuclear fallout.

Serious students of Middle Eastern affairs dismiss Erdman's scenario as wildly improbable, but his book is still being bought by many people who do not ordinarily purchase thrillers. Known readers include many of the corporate executives who attended the Time Inc. Energy Conference in Williamsburg, Va.; Saudi Arabian Minister of Industry and Electricity Ghazi Al-Qusaibi ("I thought it was fun reading, but I certainly don't take it seriously"); and some diplomats at the Iranian embassy in Washington. The book is banned in Iran itself, but Western visitors keep being asked by Iranian friends to bring back copies when they return.

Erdman comes to his subject with the sure hand of one who knows, from the inside, what lurks in the hearts of financial razzle-dazzle artists. A graduate of Georgetown University's School of Foreign service, he picked up a Ph.D. in economics from the University of Basel in 1957, then landed a job doing long-range forecasting for the Stanford Research Institute. Later he became a V.P. for a Bermuda-based investment company, then a co-founder of a small Swiss bank. The bank flourished, was subsequently bought out by United California Bank, and Erdman found himself wheeling and dealing in multimillion-dollar projects around the world. But in 1970 several officers in the bank's trading department illegally used $40 million of depositors' funds to speculate in commodities futures. Though no depositors lost money on the deals, Erdman, as the bank's president, was clapped in a Basel jail along with six other officers. Ten months later he was permitted to post bail, and left Switzerland--presumably forever. He was later tried in absentia and given an eight-year prison sentence that he faces if he ever returns.

Financial Flicks. Erdman's cell was comfortable enough: a room in a former Basel monastery where the authorities allowed him .to order dinner and wines sent in from nearby restaurants. But, not knowing how long he would stay, Erdman started writing a novel about gold speculators. Says he: "I had just come off the excitement of international banking and I was full of theories. Primarily, I was convinced the world was facing the first cataclysmic financial events since World War II, a massive increase in the price of gold and devaluation of the dollar." The book, The Billion Dollar Sure Thing, first appeared in Europe in 1973, became an international bestseller and prompted Erdman to write another, The Silver Bears. Both have been bought by Hollywood; the movie version of The Silver Bears, starring Michael Caine, will be released in November.

Now a full-time writer, Erdman divides his time between his magnificent redwood contemporary home overlooking San Francisco Bay and a 40-acre ranch in Sonoma. He is well along on his fourth novel about "international corporate bribery"--which seemingly would not find a market if The Crash of '79 actually occurs. Erdman happily admits that it probably will not; he wrote the book, he says, primarily for enjoyment and secondarily "to alert people to what could happen." The hell of it is, nobody can say his doomsday scenario is flat-out impossible.

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