Horatio is terrified when Hamlet goes after the ghost -- he's afraid of the ghost's intentions. "Something is rotten in the state of Denmark" -- and that can be many things. The impending war? Claudius ill-gotten gains? Did the queen have anything to do with her husband's death? The appearance of a supernatural ghost? Hamlet's state of mind? Nothing is certain. All loyalties must be questioned (who is spying on whom?). Anyone could be lying for their own benefit. However, I would suggest that Hamlet isn't actually talking about whether or not the ghost is lying. When he says "it is an honest ghost" he means it is a REAL ghost. The supernatural REALLY HAS come to earth. That's how crazy the state of Denmark is after the death of the king. Ghost are walking.