How Blood Cells Are Made
All blood cells are produced in the bone marrow. As children, most of our bones produce blood. As we age this gradually diminishes to just the bones of the spine (vertebrae), breastbone (sternum), ribs, pelvis and small parts of the upper arm and leg. Bone marrow that actively produces blood cells is called red marrow, and bone marrow that no longer produces blood cells is called yellow marrow. The process by which the body produces blood is called hematopoiesis.

All blood cells (RBCs, WBCs and platelets) come from the same type of cell, called the pluripotential hematopoietic stem cell. This group of cells has the potential to form any of the different types of blood cells and also to reproduce itself. This cell then forms committed stem cells that will form specific types of blood cells.

During formation, the RBC eventually loses its nucleus and leaves the bone marrow as a reticulocyte. At this point, the reticulocyte contains some remnants of organelles. Eventually these organelles leave the cell and a mature erythrocyte is formed. RBCs last an average of 120 days in the bloodstream. When RBCs age, they are removed by macrophages in the liver and spleen.

http://health.howstuffworks.com/blood1.htm

I'm guessing any number of the processes described above could go wrong and cause serious uuuuuuhhh...death.