Anti-semitism had existed in Germany long before Hitler's birth; and many Jewish soldiers served proudly in World War I; in fact when laws restricting the civil rights of Jews were passed, Jewish veterans were originally excepted. People of Aryan descent had for centuries considered themselves superior to others for reasons dating back to their times as nomads on the Eurasian steppes. Hitler simply codified and exemplified an attitude that was already present, so much so that many Germans considered it a true revolution.
A common theory at the time was Eugenics, that human beings could be perfected by selective breeding, and that certain races and cultures were superior to others. For that reason, Hitler's master race not only excluded those who were not Aryan, but also those who were feeble minded, autistic, epileptic, even suffered from severe alcoholism. These latter groups were selected for forced sterilization to prevent their reproduction.
Conversely, Hitler encouraged persons of true Aryan descent to have many children. He is shown in many photographs with small children, displaying a proud, almost grandfatherly affection toward them. Of course the children were all blue eyed blondes.
An excellent book on the subject is R.G.L. Waite's The Psychopathic God, the Mind of Adolf Hitler.
The previous post discusses Hitler's blame of Jews and Jewish bankers for Germany's humiliation in World War I; it does not address the issue of his creation of a Master Race.
Hitler's beliefs on the "master race" and "racial purity" consisted of proving the superiority of one group of people over everyone else. The Nazis and their leader, Hitler, needed to find a reason to explain Germany's loss and humiliation as a result of World War I. Their answer lay in racial justification. They argued that there were "certain elements" inside and outside of Germany that sought to bring down and bury Germany because of their natural resentment towards the Aryan Race that Germany had come to represent. Through various "applications" and "analysis" that claimed to be scientific, Nazi thinkers argued that the "Nordic" people were at the top of the racial purity pyramid, with several subgroups beneath them. Slavs, or Eastern Europeans, were considered one step or a few steps below the bottom of the racial hierarchy. At the bottom of this description were the groups that the Nazis considered "life unworthy of life." In this were grouped Jewish people and Gypsies that the Nazis were able to assert represented interests that went against the Aryan superace of Germans that were at the top of this structure. In being able to argue that that these groups were resentful and envious of German positioning at the top of the pyramid, Hitler was able to assert that German defeat came at the hands of these groups. Through this description, Hitler and the Nazis were able to find an active audience that accepted this articulation of displacement of blame and scapegoating and were able to gain power as a result.