Gems installing in vendor/ruby when doing bundle update

Is it normal to have the following directory structure under "vendor" in Rails 3?

/ruby/1.8/bin /ruby/1.8/cache /ruby/1.8/doc /ruby/1.8/gems /ruby/1.8/specifications

I removed the directory and did a bundle update, and it put the directory and its contents right back. I'm a little fuzzy on bundle, so I don't know if this is normal behavior.

The directory is not listed in my gem environment:

RubyGems Environment:   - RUBYGEMS VERSION: 1.3.7   - RUBY VERSION: 1.8.7 (2010-04-19 patchlevel 253) [i686- darwin10.4.0]   - INSTALLATION DIRECTORY: /opt/ruby-enterprise-1.8.7-2010.02/lib/ ruby/gems/1.8   - RUBY EXECUTABLE: /opt/ruby-enterprise-1.8.7-2010.02/bin/ruby   - EXECUTABLE DIRECTORY: /opt/ruby-enterprise-1.8.7-2010.02/bin   - RUBYGEMS PLATFORMS:     - ruby     - x86-darwin-10   - GEM PATHS:      - /opt/ruby-enterprise-1.8.7-2010.02/lib/ruby/gems/1.8      - /Users/me/.gem/ruby/1.8   - GEM CONFIGURATION:      - :update_sources => true      - :verbose => true      - :benchmark => false      - :backtrace => false      - :bulk_threshold => 1000   - REMOTE SOURCES:      - http://rubygems.org/