After a few months passed Hitler pressed the Sudetenland issue and was willing to solve it with an invasion. France and Britain would not have backed down in this case, and the world was on the brink of war. Around Hitler a broad array of forces formed a coalition opposed to war on military, geopolitical and economic grounds. It included even Goering and Mussolini. Officers gathered around Franz Halder and planned a coup.
Ludwig Beck wrote a memorandum with a correct strategic assessment –the Western coalition had overwhelming economic superiority and would stall and drag the war to make use of it- and an incorrect operational one –France would invade the Westwall while the bulk of the Wehrmacht was in Bohemia; this, of course, was refuted by his previous point. Von Krosigk of the RFM noted that public finances were already overburdened and under “war and inflation psychosis”. 
At the Foreign Office, Secretary of State Weiszaecker had, even before the crisis, prophetically determined that
in the event of a war with Britain and France, Germany would find itself facing a 'world coalition' (Weltkoalition) including both the United States and the Soviet Union. Even if it could count on the assistance of Italy and Japan, the outcome of such a conflict could not be in doubt. Germany would suffer 'exhaustion and defeat' (Erschoepfung und Niederlage). (p.271)

At the fateful hour Hitler was presented with the choice of stopping at the Sudetenland or going to war. He chose the former. Pent-up ideological tension was unleashed in greater anti-Semitism including Kristallnacht. Abroad, America became more anti-German.  

Those in circles of power in Berlin were relieved and drafted new strategies for a pending war in the west. 
Schacht, believing the Sudetenland would be Hitler’s last demanded, wanted a transition back to a peacetime economy, but instead a new wave of armaments expansion took place. Rationalization would free up manpower and capital for the military-industrial complex. 
The rump Czechoslovakia would be neutralized. Alliance building would draw Japan, Italy and minor European states including even Poland to military cooperation.

1939
As in 1937, new armaments targets fell flat. The Reich’s finances were in dire straits and a further ramping up of spending would produce inflation. Schacht lost his position, the gold standard was fully abandoned, paving the way for uncontrolled spending if need be, and the New Finance Plan promised a minor relief to the threat of inflation. 
Exports were in decline, and even Goering accepted a shifting of focus away from rearmament. Steel rations were cut for the Wehrmacht, and its pacing stagnated once again.

It bears noting that, though the military-industrial complex was jammed in 1937 and 1939 and now there was economic strain such as the threat of inflation, both of these years were not crises as 1934 was. Internally there was no unrest and the party had a firm grip in power.

One last burst of military acceleration would be possible if Germany waited and accumulated foreign currency for a while, but the fact was that it was outsped by its enemies in the arms race. It was a similar situation as the last year: Germany had superiority in the air and a dubious parity on land but would lose both in the long run to the much faster Franco-British war machines. In the sea, it was completely powerless.
Western powers were free of balance of payments constraints and controlled the seas, giving them a strong raw materials base. Their economies were stronger in general and about to churn out weapons faster than Germany. The British introduced conscription, were heavily investing in the RAF and would soon dominate the skies. And FDR was determined to direct America’s gargantuan industry into French and British armories. 
All this was achieved with a lower degree of mobilization: Germany had stagnant militarization and economic woes while spending 23% of national income in defense, while that figure was 17% for France, 12% for Britain and 2% for America.