During training flights, as I watched and graded my student pilots, I sometimes flew under them, sometimes above them, and sometimes dropped back to observe from a distance. At the time of this incident, I was about a thousand yards directly behind them at the same altitude and had just added power to catch up when they suddenly disappeared into a cloud bank. Almost immediately I entered the same cloud bank. With a 45-knot closure rate, I had a major problem. We were all flying blind, and a collision was only seconds away! I closed my throttle, activated my speed brake, and banked sharply to the left. At the same time, I ordered my students to bank to the right. I ordered, “Do it NOW!” Then the unthinkable happened. I had instant VERTIGO! A horrendous new experience for me. Flying in zero visibility, power off, speed brake down, in a steep turn-completely out of balance. Flight and air speed dropping rapidly, I lost control of my airplane. My body felt strange, and I had no idea whether I was upside down, sideways, or right side up. I was bout to crash. Death was staring me in the face.