Can anyone explain this demonstration with a helium balloon?

See the YouTube video (click) named "Testing the Magnetic Nature of MagneGas.mp4". A helium balloon is attracted to a metal bar.

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It's not a magnetic attraction, as the title of the video (and the Gentleman on it) suggests. In general, gases can't be magnetic because the angular momenta are uniformly distributed in all directions and the same thing holds for the rubber on the surface.

However, rubber easily collects static electricity. So the rubber balloon carries some charge $Q$ which attracts charge $-Q$ into the nearby parts of the metal – which is possible as the latter is an electric conductor. Both of the charges then attract by the Coulomb force.

(The charge $+Q$ moved to the opposite side of the metal – needed for charge conservation – has a much higher distance from the balloon so its Coulomb force is much smaller.)

If you care about the signs, rubber tends to attract electrons so the charge on the balloon is probably negative

http://www.school-for-champions.com/science/static_materials.htm

An aspect of this experiment that may assure you it's an induced force is that it is always attractive. You won't be able to place the metallic stick so that the force would be repulsive. Whatever the direction is, the opposite charge will get closer to the balloon. That differs from a magnetostatic force which could be both attractive or repulsive, depending on whether or not you rotate the permanent magnet by 180 degrees and exchange the poles. And vice versa: the force between two charged balloons would always be repulsive, much like the repulsion between hair carrying electric charge.

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Then why do they think it's magnetic? –  Craig Feinstein Jul 31 '12 at 12:44
Perhaps because they're dumb, right? Or perhaps because they want to look like revolutionaries in physics who confuse everyone else. –  Luboš Motl Jul 31 '12 at 16:07
Well, they confused me. :-) –  Craig Feinstein Aug 10 '12 at 13:19