Custom Classifications and Hierarchy

I have created a hierarchical classification for my custom module.
And assigned my items to those classifications, at least a few for testing.
The classifications are as follows:
North America
- US
Europe
- UK
- France
Etc..

I have put in the widgets on my page to see what it would look like, having added the guid and field name as per Gabe's webinar. it works in the respect that i can see US, UK and France in the widget and can click on them to filter my main list.

But i am confused why i don't also see North America and Europe in there. After all if i add an item to UK it is also in Europe, since that is the hierarchy of my classification.

I want to be able to click on the Europe link and see all European items, and then click on UK and only see UK.

What am i missing?