It’s becoming evident what is needed, a full political union in Europe.  A United States of Europe.  Will these individual sovereign countries agree to become states under a supranational organization?  

All know that Germany has the most $$ and therefore is the big dog in the Union.  They are pushing through austerity in Greece and now Italy.  Will these countries put aside their national prestige and agree to impose German-dictated austerity (and hence automatic recession) on their people?  I don’t believe so.  

It looks more like the debitor nations are calling the shots doesn’t it?  I think that Merkozy was so ticked off that Greece’s referendum potentially confirmed this point that the she/man made the blunder of creating the possibility of a country leaving the Euro.   

The ECB is talking tough.  Will Italy call their bluff?  It’s economic Mutually Assured Destruction at this point.  

So much uncertainty.  Perhaps that’s why the S&P 500 is trading at only 11-12 times next years earnings.  Many believe that 2012 earnings will need to be revised down if this uncertainty persists.