Is Affiliate masking a problem for Google?

[SEOMad]

Does Google consider affiliate masking as unethical? I have a offer website that has 1000's of affiliate links that are masked. I feel google does not like masking URL's which is why my ranking started dropping. Can any one explain the context of affiliate masking please?

[SanketPatel]

Michael Gray has written nice post on masking affiliate links. In that he has explain how and why to cloak affiliate links. Here is the link:

http://www.wolf-howl.com/affiliate-marketing/cloaking-affiliate-links/