There are many ways one could argue whether or not Hamlet is insane or that he really is a psycho killer. Along those lines, I believe that Hamlet did in fact go completely bonkers and everything that happened that was not in the presence of the king or queen was just a figment of his imagination. After contemplating this I've made up a conclusion why exactly I think he is insane.
In act 1, scene 4, line 68, Horatio says to Hamlet, “What if it tempt you toward the flood, my lord, or to the dreadful summit of the cliff that beetles o'er his base into the sea, and there assume some other horrible form, which might deprive your sovereignty of reason and draw you into madness?" This is a good example of foreshadowing because the ghost reveals that Claudius has killed him, which persuades Hamlet to take action and avenge his father. Although Horatio sees the ghost as well, he tries to convince Hamlet that interacting with the supernatural could lead him to negative consequences, ergo the reason for him going insane. Horatio and Marcellus think it’s just his imagination running wild, like he wants to to believe that everything the ghost is saying is true and that he’s not crazy for thinking it.
I feel that in the beginning of the story Hamlet seemed completely sane, he was not very content about the situation with his mother and Claudius, but not crazy. It wasn’t until after the first encounter with the ghost however, that I started to believe Hamlet begins his insanity. He says to Marcellus and Horatio in act 1, scene 5, line 169, "Here as before, never, so help you mercy, how strange or odd some'er I bear myself (as I perchance hereafter shall meet to put an antic disposition on) that you, at such times seeing me, never shall with arms encumb'red thus, or this headshake." To sum that up, what he is saying is sometime in the near future it may be appropriate to act a little crazy. I think at this point Hamlet is deciding whether or not it was the actual ghost of...
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