Nice. That really does seem to be the most useful way to handle it; I too find it quite fulfilling when I am able to treat something our society takes extremely seriously with irreverence, particularly if the issue in question is as misguided as racism. Provided all the victimized parties are "in" on the joke, too, the humour can only escalate as more and more outrageous stereotypes are co-opted for your amusement.
Almost a shame that you haven't alluded to having any German friends; it does not seem as if you would shy away from some lighthearted World War references.
I'm glad that I'm not the only one that find it something to laugh at. As for German friends, I do have one, and we dubbed him the nickname of "Hitler". He thinks it's bloody hilarious.
He will show up to places and do the Nazi salute. Sure it offends some people, but all in all, it's just a good time. People need to lighten up and find the brighter, comedic side of things.