don't make this simple mistake...

install bundler-1.3 before installing Ruby 2.0!

So as the Ruby community has been unanimously updating to version 2.0 in the past few weeks, I decided to check out some of the newest goodies available to us developers now that stable versions of Ruby, Rails, RubyGems and Bundler are all available.

If you, like me, are installing this through ruby-build, be aware that ruby-build will not install or update Bundler for you!

This is somewhat problematic because Bundler (if it's installed) has to be version 1.3 or above for RubyGems to install. Otherwise, you'll get this when you try to run any RubyGem (after installing through Bundler which actually works fine)..

There was an error in your Gemfile, and Bundler cannot continue.

Go try and install Bundler. Don't worry, I'll wait:

♬  gem install bundler --pre
Fetching: bundler-1.3.0.gem (100%)
ERROR:  While executing gem ... (Gem::Package::PathError)
    installing into parent path /Users/necromancer/Sites/api.elocal.com/vendor/gems/gems/bundler-1.3.0/.gitignore of vendor/gems/gems/bundler-1.3.0 is not allowed

This will now happen for every RubyGem you try to install.

the fix

What you need to do here is clear out the .ruby-version file so your app isn't running off Ruby 2.0 anymore, then install Bundler 1.3 using RubyGems 1.8. Or, you could just downgrade RubyGems to 1.8 by doing

gem update --system=1.8.25

That should downgrade RubyGems to a point that you can just do a gem install bundler to obtain 1.3. Once you begin installing gems with 1.3, everything in Ruby 2.0 will work out again.