Thanks Earnest for formatting the quote. The "toltalitarian combine" refers to the Axis powers. At that point in history (late 1930s) they did indeed appear to be on the way to victory. The battle of Britain, the invasion of Russia (along with the ensuing 'winter of the century'), and the attack on Pearl Harbor (which brought the US into the war) had not yet occurred. Everything appeared to be going the Axis' way.
The next booklet that discussed this ("End of Axis Powers"; 1941) foretold a draw between the Allies and the Axis. Then the "Peace, Can It Last?" talk in 1942 described an Allied victory.
The WT definitely kept up with current events. But the only part they ever discuss is the "Peace, Can It Last? talk. (See my post on this page for some additional detail.)