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1) White people with blond hair and blue eyes were the "master race" of earth. The believed them to be superior to all other humans. So much that Hitler wanted to created a super human society to rule the world based in Germany on that and developed actual programs to breed German citizens and SS based on those specifications.
It ran a bit deeper. Back in the 19th century, it was believed that all modern European are descendants of some sort of "Aryans", an ethnic group (though of to be a race back then), who exterminated the other races before them and took over their lands. It was believed that from these people, the entire region from northern India to Spain is now inhabitant with people of Aryan origin (their language family was classified as "Indo-Aryan").
It was believed by mainstream "science", however, that the origins of these people was in the Caucasus, hence why white people came to be called "Caucasians".
There were many variations of this theory, with one variant quite popular being that the "Nordic" looking people (ie blondes with blue eyes) are the purest remains of the original Aryans, and that as they spread over to the rest of Europe and Asia, they met up with other, darker, lower, more primitive races, which explained to the adherents of this theory why a dark-skinned Indian and a Persian speaks a language close to the ones spoken by a white-skinned Norwegian or German.
The Nazis believed that Germany, rather than the Caucasus (or Scandinavia), being that they were the strongest Germanic nation, represent the exact location where the Aryans came from, and that meant that the Germans were to lead the other Aryans into finishing the job they believed they started - ie conquering the world and positioning the Aryan people as the masters of other, lower races.
They claimed, however, that the pure Aryan Germans have been darkened by dark-skin "invaders", who came to Germany throughout the centuries and mixed with the Germans, in order to weaken them (that also explained, in Nazi mind, why there are so many dark-hair, dark-eyed Germans

). They claimed that after the original battle between the Aryans and their dark-skinned neighbours, the dark-skinned people managed to stop the Aryans from conquering more lands by secretly invading the Aryan's homeland (that would be Germany, for the Nazis), tempting their young, innocent and "pure" girls into marrying with them, and thus lowering the quality of the Aryan leaders, confusing their fellow Aryan people, and destroying the original pure Aryan society, breaking it into many societies who began to fight with each other.
From this thinking came the harsh Nazi racism and anti-semitism.
They claimed that the Europeans Jews, who lived in Europe since ancient times, and which were "known" to be of Middle-Eastern (meaning - dark) origin, were in fact the dark-skinned invaders who mixed with the Aryans to destroy their greatness.
They believed the Jews remained in Europe to this day to make sure the Aryans would never again rise.
They believed that ideas such as socialism and democracy, which advance the fellowship of humanity and equality, were brought to Europe by the Jews in order to make the Aryans believe in theories which advance race-mixing.
Ironically, they believed that the fact that the Jews are so well integrated into German society is an evidence and their plan to keep the German people from their destiny as leaders of the Aryans.
They also believed, that it is that destiny who gives them the duty to "liberate" the rest of the Aryans from these "dark invaders", and prepare the ground for a second Aryan invasion, lead by the Germans themselves.
For this, they claimed, the German people need to cleanse themselves of these invaders first, then cleanse the rest of Europe and any other territory which will come under their wings.
As you can see, this theory leads shortly to genocidal ideas...
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people from the Baltic, and any dissodents who disagreed were considered sub-human
Not from the Baltic, from Slavic countries.
Many slavic-speaking countries, including the largest - Russia, still didn't experience the industrial revolution when these theories of Aryan supermacism came to be, and so the Aryan supremacists came to point the Slavs as a proof of what is to come to themselves when the process of mixing with dark-skinned asians is completed - backwardness and what they saw as "general Slavic stupidity".
They believed that as one goes eastern, one will found more primitive "Slavs", untill one reaches non-Aryans (ie Mongols and Turks).
The meant, that as the most Eastern Slavic speaking country, Russia was evidently, by Nazi logic, the most backward country.
They believed that these once Aryans were so mixed with non-Aryans that they are beyond redumption and liberation, and so they are best to serve their Aryan masters, because their closeness and some-sort of Aryan-origin enables them to best understand the Aryan need.
This gave rise to the idea that all Slavic people (Poles, Ukrainians, Russians etc.) should serve as slaves in the Third Reich, and their territory being given to the surviving Aryans to create the empire from where the Aryans could launch their future invasion (or simply survive... there was a Nazi stream who believed that the Third Reich should simply serve as a defined territory where the Aryans could survive as race

).
The Nazis saw the fact that Russia became communist as yet another proof of the Slavs being totally subhuman (they believed that communists, just as converter to Judaism, are creatures who chose to join the dark-skinned Jews in their task and role as limiters of the Aryans, and thus should be exterminated as well).
As one can see, this logic is pretty twisted and obviously has no reality to it.
It was appealing enough for the Germans after WW1 to believe in, because many, who still believed in German greatness, couldn't believe the simple fact that Germany lost because it was wrong.