Not arguing the case (yet), but here are some instances of investor irrationality. Copied from an email exchange I had.

1. The belief that one can make money in derivatives. Derivatives are a zero-sum game. They have their uses in risk transfer, but as an investment tool? Dangerous at best.

2. The belief that gold and to a lesser extent silver are worth something. These are actually two of the most worthless minerals on earth.

3. The capital market theory. A straightforward analysis of the basic equation, r = r_f + beta(r_m - r_f) + alpha, will reveal that it is based on two contradictory assumptions. I won't go into detail, but you can work it out by noticing that risk equals probability of default over probability of payment.

I certainly don't think investor irrationality is restricted to the US, if that's what you're asking. If anything, Britain's investors are less rational than the US's, and they're paying a correspondingly higher price.

All the contributing factors you list are valid, but I think the most significant chunk of them could be said to stem from investor irrationality.

1) Derivatives are always zero-sum. That means that for every gain, someone has lost proportionally. Expected return on investment? Zero. The only sensible use of derivatives is to convert a floating rate into a fixed one and vice versa.

2) Gold is far less useful than copper. It's over-valued for aesthetic reasons. We think it looks pretty. That's a pretty poor reason to pay $1,000 per fine ounce.