Apparently the tool is also called a 'strickliesel' in English, the technique having been developed in a German speaking country I suppose (I'll have to consult Wiki on that).
The English term is 'spool knitting' and I would still not know how to do it if I had not found the video that follows:
Here's a link to more information and to external links.
This video leads to lots of others. I'm going to try it. I hope it's less painful for my rheumatoid hands than ordinary knitting, which I do the UK/American way. The Germans have a different technique which is much better, but I can't get the hang of it....
I suppose knitting is like riding a bicycle: you learn it when you are young and that's it for life. For instance, I never learnt to balance AND take my hands off the handlebars of my bike. I think I'd better stick to the strickliesel and hope I don't fall off my chair!
CODICIL 24th January 2016.
To my shame I got tired of the strickliesel even before I had mastered it!