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NEW YORK (TheStreet) -- We are now approaching a very dangerous period for the markets from a monetary standpoint, but it's not for any reason you've probably ever heard about. It started, as it usually does, in mid-April. It will extend until mid-to-late September.

According to Austrian business cycle theory, an increase in the money supply leads to booms. The booms cause malinvestment, or investment in the wrong industries. Later, when the money supply stops increasing, industries with the most malinvestment, especially banks which live on new money along with industries that require very low interest rates, crash. The market is dragged down with them, and the bust begins. The applicable central bank then increases the money supply once again, and the business cycle starts anew with a renewed boom, to our chagrin.

Tracking the money supply is easy. The numbers are published weekly on the Federal Reserve H.6 report. There are different ways to calculate it, but let's look at the weekly average of the non seasonally adjusted M2 numbers. You'll notice on the May 21 release that money supply peaked at $12.081 trillion on April 6. Three weeks later, money supply was down over 2.2% to $11.824 trillion. That's a big drop.

But the thing is, large drops in money supply generally tend to happen around mid-April. These don't pose a big threat to stocks, so long as growth recovers quickly and nothing happens to spook the markets. But if it doesn't, and some big event catalyzes a selling frenzy, like Grexit, or a rate hike, or Ukraine and Russia, then there is no new money in the system to counter hard selling. The result could be a crash.

It's almost uncanny how money supply peaks in mid-April, year after year. Last year money supply peaked at $11.353 trillion on April 14, quickly dropping 1.7% by April 28. But growth recovered by early August and there was no crash.

In 2013, money supply shrank 2% in two weeks from, again, an April 15 peak of $10.681 trillion. But growth picked up again by August and there was no crash.

The same thing happened in 2012, with M2 peaking on April 16 at $9.97 trillion, and shrinking 1.9% in two weeks to $9.782 trillino. But money growth picked back up by July and there was no crash.

But there was one year in recent history when money growth peaked in mid April, shrunk by a similar percentage in a few weeks, but did not pick up again all the way until October. That means, for nearly six months, there was no new additional money in the system. And during those six months, something indeed did spook the markets. And there was no new money in the system to cushion the hard selling that followed. And the market crashed.

That year was 2008. On April 14, 2008, money supply peaked at $7.79 trillion. In two weeks, it shrunk 2% to $7.638 trillion. The one week M2 average did not consistently hit above the April peak until October 6. But by then it was too late.

It is still early after the traditional seasonal mid-April money supply drop. There is some time yet to recover. That said, we are now in a very dangerous period of no money growth and potential catalysts that could cause hard selling. Judging by recent history, we have until August or September at the latest to start seeing numbers substantially higher than $12 trillion on the M2 one-week average.

If something like a Grexit were to happen by then and there is more new money in the system, then there could be a knee-jerk selling event, but it would present a buying opportunity as the selling would quickly be absorbed by new money. But if September comes and goes and M2 is still below or at $12 trillion and something happens to the Eurozone, or a sooner-than expected rate hike occurs, then the markets could be in trouble.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.