In The Hobbit: The Battle of the Five Armies just before Galadriel confronts Sauron in Dol Guldor, Sauron says:
It has begun. The East will fall. So shall the Kingdom of Angmar rise. The time of Elves is over. The age of Orc has come.
What I don't understand is what on earth (or Middle-earth?) does Sauron mean by 'The East will fall'. This statement contradicts his entire speech. The East refers to Sauron's own domains - Mordor and its allies (Rhun & Harad).
What does Sauron refer to as 'The East'? Is he predicting his own destruction? Is this a flaw of the movies? Or is the compass of Middle-earth upside down?