For an understanding of this racism, it is actually best to read Hitler's book 'Mein Kampf'.
Hitler saw European civilization 'threatened' by international capitalism, liberalism and communism. These forces were active in Germany / Austria at the time. It so happens that Germany and Austria had a large Jewish population, and many people active in these movements were Jews, so Hitler blamed the Jewish race for these things. It was in Vienna that he developed his prejudice, where he came across urban Jews on a big scale.
In those days, it was already accepted that some races were more advanced or evolved than others, e.g. whites above blacks, etc. Hitler expanded on this, citing the Germanic race as the top of the evolutionary tree, with the Jews at the bottom. He seriously thought the Jews, as a race, were out to destroy German civilization.
Jews had lived in Germany since the Middle Ages; refugees from their homeland in Palestine, and there had long been a prejudice, an anti-Semitism, against them as 'outsiders'. You know the sort of thing - 'taking our jobs', etc. Hitler played on this prejudice, and many people took it in.