Bob: Yeah. He was just blowing smoke up my ass to get me to buy the car.
one said cure for many ailments (including constipation) was a "tobacco enema" in which the purveyor would literally blow smoke up the afflicted's rectum with a device created solely for this purpose. obviously people caught on soon enough, and figured out that tobacco enemas were embarrassing as well as useless.
as such, the phrase became the euphemism it is today for selling a line of nonsense to an otherwise naive or unsuspecting rube.
person 2: "you're totally blowing smoke up my ass"
Guy 2: Are you blowing smoke up my ass?