The Balrog of Moria

[lathspell]

It's close to both Rivendell and Lothlorien, and in the UT Gandalf says that he after all knew what Sauron's original plan was: to whipe out Rivendell and Lothlorien as soon as he was ready. Therefore, that Moria was under the leadership of the Balrog, was quite good to him.
If the Dwarves would have Khazad-dum back, they would be able to help both of the Elven-colonies. After all it was Durin's folk that lived there, and they were a people to be reckoned with. It would be another opponent that would be strong and numerous, and therefore Sauron would have liked the Balrog there better.

'It doesn't do to keep a live dragon out of your calculations.'

I guess Sauron thought the same of Durin's Dwarves in that particular place.

But after all, I really doubt if Sauron knew what evil was awakened in Moria. Of course he knew that it was a place fallen into darkness and evil, but I don't think he knew what the evil was that was stirred there. Therefore I also don't think that they were in league. Sauron knew that a great distress was stirred in Moria and he was content. The Balrog had Khazad-dum with alot of Orcs, and the Orcs had their gold. He was content with that as well.
I suppose that if Sauron knew that it was a Balrog in the Dwarven-mansions, he would have sent an emissarie or gone to Moria himself to speak with his partner in the Old Wars.

greetings,
lathspell