Are mnemonics by creating associations good for memory? I read a book which says that to remember the lists of arbitrary objects, we should take a well-known ordered list (so that you know what is on the first place, what is on the second) and associate the items of this familiar list with your target list items. This is especially important for abstract objects because our brain can memorize only visual pictures (you can visualize familiar things). For instance, instead of directly memorizing the 10 abstract amendements to (US) constitution, (1.Freedom of Speech, 2.Right to Bear Arms, 3.Protection From Quartering Troops, 4.Freedom from Unreasonable Search and Seizure, and etc), you translate them into a list of visualizable amendment images, (1. Speaker, 2. Gun, 3. Soldier, 4. Spotlight, 5. A picture of you, 6. Judge riding a fast motorcycle, 7. Jury, 8. Excessive amount of money, 9. Making a right turn with your hand over your mouth, 10. State Capitol building). Then, you come up with another, well-known list of visualizable loci objects, e.g. (head top, nose, mouth, ribs, liver, joint, cap, fibula, ball, sand),



Finally, you invent 10 stories, to map the loci items to the amendment images. In overall, ordered loci list serves as a list of keys that we can iterate and, by means of vivid stories, map to the target abstract items. 

Yet, I see that you memorize 4 lists (original list, keys and images and stories) in place of single amendment list alone. This is 4x more information. It would be ok if the associations were natural and teach me the world around me. However, they must be absolutely bizzare because they do not exist, unnatural and, secondly, the outlandish pictures are much better memorizable (they call this thinking out-of-the-box) 



Also, inventing the stories is too creative task for me. I feel like I waste too much mental energy to create garbage, the stupid associations in my head. Is it right? Won't this mnemotechnique create a mess in my head?

ps

Idriz Zogaj, Daniel Kilov and Joshua Foer are memory athletes that popularize the approach in TED conference.
Just a few words on mnemonics before answering your question. I have been practicing for two years. First because I was impressed how easy it was to remember items using these techniques. My personal best time for learning the order of 52 cards is 1min 40s, which is not really good compared to real competitors, but the point is that practicing 30min a day during 3 months can be enough to get this kind of performances. Of course to do that you have to learn a code that binds numbers or cards to predefined images. I can't be more specific because I would risk to be off topic.   

However don't expect too much from these techniques concerning real world knowledge. With training you can learn fast as hell a list of words, but learning more semantic knowledge is - I think - more challenging. If you find good images, It can provides you a perfect recall, but you would need spaced repetition to ensure it on the long term. If you don't repeat, you take the risk to loose everything you learned, more than with classic methods I think. Unfortunately, I don't have many sources apart from my experience and experiences of friends to back up this claim. However, I found a study by Wang et al. (1992) cited in part 7 of an interesting review on learning techniques by Dunlosky et al. (2013) which found this effect on the use of mental imagery on vocabulary learning. There is no absolute proof that mnemonic techniques can  work for everything, but (1) it's interesting to see how it works (2) it is funny, especially memory palace building (3) if you spend enough time to learn a code, you can learn phone numbers, credit cards, poker odds and things like that very easily.

Concerning your practical questions, a good approach would be to check how the community proceeds to use mnemonic strategies. Have a look on the Mnemotechnics Forum on ArtOfMemory.com
 for example or their wiki. I think you would get more reliable advices than in books. For example the peg technique you mention (i.e. loci object in your words) is clearly less popular than the use of real place as locis. It has two main advantages :


It provides a good organization (your list order follows the spatial order of your locis). Then to remember your list, you just have to do a mental travel. 
It is easier to store an image in a place, no need to find specific association, just picture your mental object like if it were really in your loci and let the magic happen.


Then, to answer your question, you really just need to memorize 1 thing : the images. Loci are just a powerful way to retrieve these images, like a storing device. Images are chosen to be firmly tied up with the item you want to learn so you don't have to spend time to learn the association you made. 
Images don't have to be 'absolutely bizzare', it makes things more memorable but it's not an absolute condition. Trying to prove this, a study found no effect for learning a list of words, but I don't have the reference now. Same remarks for the stories. It makes things more memorable, and can provide you some links between the images, but again it's not an absolute condition. Moreover, stories can be very short, like a simple action or context linking the image 1 and the image 2.

You should not waste time and energy on creating associations. On the opposite, you should relax and let them come to your mind, and take the first things popping up. This kind of creativity is not a sort of adult-creativity for which time and work is needed, but rather a sort of child-creativity for which you just have to let your imagination take the control of your thoughts. It should not be a painful task, on the contrary, you should get some fun.


Wang, A. Y., Thomas, M. H., &amp; Ouellette, J. A. (1992). Keyword mnemonic and retention of second-language vocabulary words. Journal of Educational Psychology, 84(4), 520.
Dunlosky, J., Rawson, K. A., Marsh, E. J., Nathan, M. J., &amp; Willingham, D. T. (2013). Improving students’ learning with effective learning techniques promising directions from cognitive and educational psychology. Psychological Science in the Public Interest, 14(1), 4-58.