How to cancel all government debt in 10 easy stages

Following on from my videos on "Debt Annihilation" ("Anéantir la Dette"), I've just realized that the whole insane fractional reserve banking can be used to eliminate all government debt in 10 easy stages. Here's how.

Ingrediants

1 cooperative bank
20 cooperative individuals (volunteers please)
€1000 to start (I'm happy to put up the money)
A network of taxhavens so that the flow of money cannot be controlled (conveniently, they are already in place)

The sequence of events is shown in the following table.

Step 1. 
Player A (me) deposits €1000 in the bank (column A)
The Bank uses the fractional reserve banking mechanism to create 11.5 times that sum which it lends to Player B (Column B). Player B agrees to repay the loan after 1000 years with 0.0% interest.
The bank now has assets of €1000 in deposits and the €11,500 owed by Player B, making the total assets €12,500 (Column E). The ratio of deposits to assets  (Column F) is thus 1000/12,500 =8% (consistent with the Basel III regulations).
Step 2.
Player B gives the €11,500 to player C who deposits the money with the bank.
The Bank generates €132,250 and lends it to player D.
Step 3.
Player D gives the €132,250 to player E who deposits the money with the bank.
The Bank generates €1,520,875 and lends it to player F.
Step 4.
Player F gives the €1,520,875 to player G who deposits the money with the bank.
The Bank generates €17,490,063 and lends it to player H.
Step 5.
Player H gives the €17,490,063 to player I who deposits the money with the bank.
The Bank generates €201,135,719 and lends it to player J.
Step 6.
Player J gives the €201,135,719 to player K who deposits the money with the bank.
The Bank generates €2,313,060,766 and lends it to player L.
Step 7.
Player L gives the €2,313,060,766 to player M who deposits the money with the bank.
The Bank generates €26,600,198,805 and lends it to player N.
Step 8.
Player N gives the €26,600,198,805 to player O who deposits the money with the bank.
The Bank generates €305,902,286,254 and lends it to player P.
Step 9.
Player P gives the €305,902,286,254 to player Q who deposits the money with the bank.
The Bank generates €3,517,876,291,920 and lends it to playerR.
Step 10.
Player R gives the €3,517,876,291,920 to player S who deposits the money with the bank.
The Bank can now generate €40,455,577,357,079.
It lends $15 trillion to the US government which then pays off the entire US national debt
It lends €10.42 to the 27 EU countries to pay off the entire EU debt
The rest of the money can be used to pay off the debts of the rest of the world.

All countries would of course agree to pay the bank back after 1000 years with 0.0% interest.

If any of the players A-R feel worried about owing billions of euros to the bank (even though they don't have to pay the money back for 1000 years), the government might take over their debt too. 

Note, that the transfer of funds between the different participants (players A to R) could be done in taxhavens so that no-one can see what is going on (this is, after all, what commercial banks do all the time). 

Is there anything that could stop this? As you can see from column F, the ratio of deposits to assets stays at 8% throughout, so it should be OK with the Basel III rules. The only difference between what I am proposing and normal practise in the banking sector is that commercial banks always require that their loans are paid back with interest (despite not actually having the money they lent). Here, our friendly bank is just a bit generous, since it only asks to be paid back after 1000 years with 0% interest. But surely that's OK? Is there some law that states that money created by the fractional reserve banking system can only be lent with interest? If there is no law, then this proposition is legal.

I agree that the whole scheme seems totally insane. That's normal, because it is insane. But it's the system that currently exists, carefully set up by bankers over the last few centuries and kept well out of the spotlight. And I bet that activities very similar to this are going on right now but we don't get to hear about them because the banking system has set up its web of taxhavens so that noone can figure out what's actually happening.

Obviously, if this cunning plan did get used, the banks will be screaming mad. We will have killed  the goose that has been laying them golden eggs for decades and even centuries. The goose that has allowed the banks to extort  €5.6 trillion in interest payments from EU taxpayers since 1995. The goose that will allow the banks to take a further €5 trillion in interest payments from US taxpayers in the next decade. The banks will no doubt do everything in their power to stop that happening.

But the fact is that there is only one way they could stop this. And that is to make fractional reserve banking and the creation of money by commercial banks illegal.  Personally, that's fine with me. That would be the best possible result.

Essentially, either the mechanism works and all governments are off the hook, or the banks have to accept that their insane money creation mechanism needs to be banned for ever. It's heads we win, tails they lose. What a delight to have the boot on the other foot for once.

Finally, I note that the mechanism isn't limited to paying off government debt. Steps 1-10 could be repeated and the money used to  provide drinking water for all the worlds populations, replace fossil fuel power stations with renewable energy based on solar power, cure cancer, etc etc (feel free to add what you like).