O que significa o idiom talk through hat?

I don't know about the rest of the world, but in Brazil fishermen are famous for exaggering stories or even making up entire events purely based on lies. The stories usually revolve around things like the size of the fish, unexpected occurrences, quantity, etc. 

The last time I heard a fish story was when my uncle went to the lake with his friends and came back telling us about all the fish he caught, including the massive human-sized one that got away. 

Nobody believed him. They said he was just talking through his hat like he'd always do after coming back from the lake. If the fish was that big, why nobody else but him saw the fish escape?

When you talk through your hat, you exaggerate your achievements or knowledge, bluff, boast or simply talk of nonsense, say foolish things.