I think we all know this, but shielding and grounding are two different things used for two different purposes. I copied this good explanation from a different discussion board:
"When you SHIELD you are doing just what the term implies. You surround the electronic parts with some kind of conductive material in an effort to block stray radiation from affecting them. Agreed, the shielding does have to also be grounded to be effective.
GROUNDING involves attaching components or parts of components to a common electrical conductor, which is often ultimately attached to an actual earth ground. However, a GROUND doesn't have to be attached to an earth ground. The term just refers to the common conductor in an electrical circuit where the ground side connections are made. In an auto the chassis/body is usually the GROUND part of the circuit, even though it's not attached to an actual earth ground.
The GROUND circuit in a guitar usually just consists of several wires that are attached to a common point, (usually the back of a pot), and then all of this connects through the jack to the outside (shield) conductor in the cable, which connects to the GROUND side of the amp, which hopefully connects through a three prong plug to a GROUND wire in your house wiring, which connects to an actual earth GROUND.
edit: Shielding and grounding are not the same thing, but they are usually tied together in a circuit, which makes it confusing. They also often often serve the same purpose, e.g. in a guitar help to prevent hum, noise, etc., which adds to the confusion. When you SHIELD you're physically covering or surrounding components with some kind of conductive material. When you GROUND you're connecting a component to the ground side of the circuit."
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