It's hilarious!
I just had one of these "irony vs. reality" incidents with Anoreth. She's writing a science fiction story, and the plot includes a group involved with interplanetary banking. I said, "Oh, just like the International Conspiracy of the JOOOOOS!" and we discussed how the Jooos lend money at exhorbitant interest, take over governments, manipulate the weather and the price of gas, and all that. (It's probably their fault that Dictator Klath of Planet Zongo failed math, too.)
She hustled off to write more (before I found something else for her to do), and I assumed she realized that it was all sarcasm ...
Then this morning, she found something in her history book about the Jewish Welfare Organization, which was helping out refugees during World War I. "Mama, is this the International Conspiracy of the Joooos you were telling me about yesterday?" AAAAGH!