This article in WSJ is a good read on conspiracy theories:
We live in age of conspiracies, or rather, we are more aware of conspiracy theories than we used to be. Theories involving the hidden hand reproduce on the Internet and instantly jump borders. Giving the stories plausible heft are the exotic sites and TV stations now beaming everywhere, their studios, anchors and Web sites looking as professional and reliable as those of CNN, ABC News or the BBC. Channels such as Russia Today, Iran's Press TV and Al Jazeera pass on theories involving the supposed "real stories" behind world affairs to millions. Globalization not only assists with the spread of conspiracy theories, but because it causes such rapid change—in migration, jobs, security threats and the way we live—it leaves people desperate for clear, comforting answers. It is better to think that someone is in charge of everything than that the world is more often prey to accidents, madness and coincidence. That's why movies are full of dastardly but brilliant plotters, and hardly anything happens by chance.
My own take on Why do Conspiracy Theories Work
The temptation to believe in conspiracy is a trap traders and investors should avoid. Unfortunately 90% of the trading/investing blogosphere is active peddlers of conspiracy theories.
The sure shot way to ensure your trading blog is read by most people is to claim a conspiracy by govt to manipulate economic data, a conspiracy to keep the market up, a conspiracy to keep gold prices down, and if none of that works then use the mother of all conspiracies: Goldman Sachs controls the universe.