Nietzsche's views on race

I've just finished reading Forgotten Fatherland, and was surprised to encounter the following passage about Friedrich Nietzsche's views on racial (im)purity:

There is no racial type in Paraguay, no 'pure' races except a few thousand Indians in the remote north and west, quickly being wiped out and their forest felled.  With at least twenty Indian women apiece, gifts usually from the local Indian caciques, the conquistadors had mixed their Spanish blood so fast that Paraguay was not a hundred years old before a mestizo race was a fact.  One enlightened governor even encouraged the races to mix, but it wasn't really necessary.  Like ink in a bucket, the Spanish blood rippled outwards from the capital, sometimes through marriage to noble Indian women, but more often through rape and concubinage.  Other immigrants added their genes to the cocktail - European adventurers, negroes and the mamelucos, fierce Portuguese-speaking land-pirates from Sao Paulo, part-Indian, part-negro, who descended on the Jesuit missions and carried off the Indian neophytes as slaves.

Nietzsche had applauded mixed races, using the Greeks as his example; he thought they produced the hardiest, most productive artists and minds.  The racial distinctions in Europe he wanted to subsume into the model of the 'good European'; though he spoke of a master race, he did not have a specific race in mind and certainly not the German.  He envisaged a group of individuals displaying masterful qualities, not a race as we would recognise it, for it is clear that his ideal men can arise in any race at any time: no one race is supreme.  For all his championing of the 'prowling blond beast', the creature of conquest, he would have found in the hardy mestizo culture something admirable and enduring.

My limited knowledge of Nietzsche (from collegiate reading lists decades ago) would not have predicted that paragraph; I guess I've been misled by popular culture linking him with the National Socialists in later years. 

And I certainly would never have predicted him using Greece as an example of mixed race culture.  I know that all nations and cultures are ultimately melting-pots, but Greece would not have popped to mind as the prototype of such.  Is it? Or was it in his day, moreso than other European nations?