He was going nuts with frustration in the face of what he considered to be phoniness and untruth.
also phoney, "not genuine," 1899, perhaps an alteration of fawney "gilt brass ring used by swindlers."
His most successful swindle was selling "painted" or "phony" diamonds. He had a plan of taking cheap stones, and by "doctoring" them make them have a brilliant and high class appearance. His confederates would then take the diamonds to other pawnbrokers and dispose of them. ["The Jewelers Review," New York, April 5, 1899]The noun meaning "phony person or thing" is attested from 1902.
Not real or genuine; false; fake: You phony little fake (1900+)noun
: I ain't phoneying them woids (1942+)
[fr late 1700s British underworld slang fawney fr Irish fa´inne, ''ring,'' referring to a swindle in which the fawney-dropper drops a cheap ring before the victim, then is persuaded to sell it as if it were valuable; as the sequence of spellings, phoney and later phony, indicates, the US spelling is probably based on an attested folk etymology revealing the notion that one's feelings or even identity could be readily falsified on the telephone]