Thor is not available

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I have installed Ruby 1.9.2 along with installing the rails gem. I have now tried to create a new rails application with:

$ rails new foo -T

I am immediately prompted with

Thor is not available.
If you ran this command from a git checkout of Rails, please make sure thor is installed

I have thor installed and I have no clue what to do. Please help.

Warning, I'm a rookie at this.

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I found the answer to my own question.

I had Ruby 1.9.2 installed on my Mac OS 10.7 and Xcode 4.2 installed. Thor does not work well with the newest Xcode and once I installed Ruby 1.9.3 everything seemed to work fine.