Error when creating a test rails project

I'm new to Rails and Ruby. I'm trying to create a test project with the following command in the OS X Terminal:

rails new project_manager

Executing that command gives the following error:

/Syste开发者_Go百科m/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems.rb:827: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:261:in `activate'
from /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/rubygems.rb:68:in `gem'
from /usr/bin/rails:18

What does this error mean? Any help is appreciated!

Run:

gem update --system
gem update rails
gem update bundler

This will update your RubyGems to the latest version, update Rails to the latest version, and update Bundler to the latest version.