In the Japanese version, Belthasar said "After building Chronopolis, the Time Crash that it brought about was unexpected." However, Masato Kato later precised in the Ultimania interview that Belthasar was simply hiding the truth from Serge and that Belthasar really had planned everything (fact confirmed by Lucca's ghost in both Japanese and English versions). Kato also assisted Richard Honeywood when the game was translated in English, and Belthasar's line was changed to the now famous:
"Well, that research led to the creation of Chronopolis and to the Time Crash... You might think I really blew it, but perhaps it was really my finest hour!"
So, yes, Belthasar planned absolutely everything, including Lavos' execution of the Time Crash. This megalomaniac quote of his indeed sets the tone :/
As for how Lavos was able to see the future... Lavos lived in a "pocket dimension" (check the encyclopedia if necessary). So, the prevalent theory is that when Lavos was defeated, the timeline was rewritten with him absent in all eras except for the one or two brief moments in which he was outside of his pocket dimension. 12,000 B.C. was one such moment. In the CT timeline, Lavos awoke in 12,000 B.C. and destroyed the Ocean Palace and Zeal. In the post-CT timeline, Lavos awoke in 12,000 B.C. and destroyed the OC and Zeal and also time-crashed Chronopolis.
Note that there probably wasn't any failure in the future to begin with, it's just that the Frozen Flame was charged too much (just like the Mammon Machine) and Lavos reacted in angriness or whatever feeling.
