Rails Server Error: "Could not find RubyGem rails (>=0) (Gem:: LoadError)"

Question

Hardest bug that I've encountered -- would love y'alls help! (Still learning and a beginner).

I tried deploying on Heroku earlier and now my app doesn't work on both Heroku and locally.

Trying to now fix only the local situation.

Other things that I changed were the database.yml file. It now uses postgresql for all, but in my GemFile I specified sqlite3 for testing.

rails s
/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems.rb:777:in `report_activate_error': Could not find RubyGem rails (>= 0) (Gem::LoadError)
    from /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems.rb:211:in `activate'
    from /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems.rb:1056:in `gem'
    from /usr/bin/rails:18

My Gemfile:

source 'https://rubygems.org'

#ruby '2.0.0'

gem 'rails', '3.2.3'

# Bundle edge Rails instead:
# gem 'rails', :git => 'git://github.com/rails/rails.git'

group :development, :test do
    gem 'sqlite3'
end

group :production do
    gem 'pg'
end


# Gems used only for assets and not required
# in production environments by default.
group :assets do
  gem 'sass-rails',   '~> 3.2.3'
  gem 'coffee-rails', '~> 3.2.1'

  # See https://github.com/sstephenson/execjs#readme for more supported runtimes
  # gem 'therubyracer', :platform => :ruby

  gem 'uglifier', '>= 1.0.3'
end

gem 'jquery-rails'

gem 'paperclip'

Ran bundle install and got the following message (Do I have to do anything from this message?):

Depending on your version of ruby, you may need to install ruby rdoc/ri data:

Your bundle is complete!
Use `bundle show [gemname]` to see where a bundled gem is installed.
Post-install message from rdoc:
<= 1.8.6 : unsupported
 = 1.8.7 : gem install rdoc-data; rdoc-data --install
 = 1.9.1 : gem install rdoc-data; rdoc-data --install
>= 1.9.2 : nothing to do! Yay!
Post-install message from paperclip:
##################################################
#  NOTE FOR UPGRADING FROM PRE-3.0 VERSION       #
##################################################

Paperclip 3.0 introduces a non-backward compatible change in your attachment
path. This will help to prevent attachment name clashes when you have
multiple attachments with the same name. If you didn't alter your
attachment's path and are using Paperclip's default, you'll have to add
`:path` and `:url` to your `has_attached_file` definition. For example:

    has_attached_file :avatar,
      :path => ":rails_root/public/system/:attachment/:id/:style/:filename",
      :url => "/system/:attachment/:id/:style/:filename"

Answer 1

Instead of running

rails s

run

bundle exec rails s

to be sure that you are using the gems referenced in the Gemfile instead of the local gems.