After suffering a head wound in World War I, a hospitalized Austrian soldier, Klaus Schneider (Klaus Maria Brandauer), discovers a natural ability to hypnotize people when he calms a deranged, suicidal patient. Working with the sympathetic Doctor Bettelheim (Erland Josephson), Klaus develops a sense of premonition that enables him to read the thoughts of others. When the war ends, an officer from the hospital, Captain Tibor Nowotny (Károly Eperjes), becomes Klaus's manager, and Klaus starts a mind-reading act, changing his name to Eric-Jan Hanussen. At his first performance in a provincial town, he surprises even himself when he correctly predicts the sinking of a ship on its way to America. This brings him good publicity and also the notice of the police, who arrest him for charlatanism. At his trial, Eric-Jan gives an impassioned speech describing himself as a simple man who can feel the fear and anxiety of the shattered peoples of the dismantled Austro-Hungarian empire. Acquitted, Eric-Jan decides to move to Berlin. Although he claims to be apolitical, when pressed he predicts that Hitler will become chancellor and that the Reichstag will burn. Soon Eric-Jan is drawn into the dangerous world of art and politics in 1930s Berlin, mixing with characters clearly based on Leni Riefenstahl and Joseph Goebbels.