Ruby with Psych bundled as gem can no longer work with YAML if the GEM_PATH environment variable is set incorrectly. (This includes it pointing to another Ruby installation!)

gistfile1.txt

$ ruby -v
ruby 2.0.0p451 (2014-02-24 revision 45167) [universal.x86_64-darwin14]

$ env GEM_PATH=/gem/home/without/psych/gem ruby -ryaml -e ''
/System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/yaml.rb:4:in `<top (required)>':
It seems your ruby installation is missing psych (for YAML output).
To eliminate this warning, please install libyaml and reinstall your ruby.
/System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require': cannot load such file -- psych (LoadError)
	from /System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require'
	from /System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/yaml.rb:5:in `<top (required)>'
	from /System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require'
	from /System/Library/Frameworks/Ruby.framework/Versions/2.0/usr/lib/ruby/2.0.0/rubygems/core_ext/kernel_require.rb:55:in `require'

RVM, and possibly other Ruby version managers, appear to automatically configure your profile to set this env variable, pointing to their installation. However, this will break when using a different Ruby and gems that have C extensions.